What happens when the taps are turned off?
Will your business be able to stand alone?
2020 has thrown us hurdle after hurdle and many businesses have taken a big hit. While everyone is trying to make the best of a bad situation, many business owners may find themselves thinking, “Will we actually make it through this period and be able to get our business back on track?” The Government has thrown plenty of lifelines to help get businesses through this period, but what happens when the taps are turned off? How long will it take your business to ‘get back to normal’?
As a Director you want your business to succeed and bounce back, but what if it doesn’t and the business becomes insolvent? Will the corporate veil hold strong and protect you personally from the debts of the business? This is where Safe Harbour can come into play. If the Director of a business enters Safe Harbour, it gives the business an opportunity to turn itself around without putting the Director’s at risk of personal liability.
One of the lifelines that have been handed to businesses from the Government during this pandemic is a blanket COVID Safe Harbour. Safe Harbour provides Directors with the assurance that if their business doesn’t make it through, the corporate veil will not be smashed, and they won’t be held personally liable for debts incurred – also known as insolvent trading. This protection provides Directors time to work through this unprecedented trading period, however on 24 September 2020 COVID Safe Harbour is due to be turned off. Subject to any further extension by the Government, Directors will have a choice to either lose the blanket protection or engage a safe harbour specialist, make yourself fully compliant and keep it.
Our latest newsletter explores whether a business should be considering Full Safe Harbour, what is required to enter Safe Harbour and what your next steps might need to be.