Not unsurprisingly as we plan to exit lockdown, the measures designed to both financially support and protect businesses from failure during lockdown now need addressing. 

That process started this week as some, but by no means all, of the temporary protections for businesses brought in during lockdown are extended. This week these were: 

Business tenancies - protection from eviction by landlords of commercial properties for non payment of rent extended from 31 March 2021 until 30 June 2021. 

Residential tenancies -  protection from eviction and requirement for landlords to provide tenants 6 months notice of eviction extended to 31 May 2021.  

Warning

Other protective measures set to expire this month that have yet to be extended are:

30 March 2021 - the exemption for small suppliers from being required to continue supply (unless causing hardship) on the same terms to insolvent companies (so called "ipso facto" clauses) and the relaxation of the eligibility criteria for companies applying for moratorium.

COMMENT: The effects of "ipso facto" clauses on small businesses has been mitigated during the break in trade during lockdown, but its use will likely escalate with the anticipated increase in business insolvencies as we exit lockdown. Businesses should seek advice if required to continue supply by administrators of companies when such supply could cause hardship. The loss of the relaxation of the eligibility rules for moratorium is of limited consequence as new moratoriums have been little used and will in time become defunct. 

31 March 2021 - the temporary practice direction for corporate procedures to pragmatically allow automatic procedures for meetings and resolutions to occur remotely. 

COMMENT: given full exit from lockdown is not anticipated until at least June, these could be usefully extended and elements adopted permanently in this technical age.  

 31 March 2021 - the temporary restriction on corporate statutory demands and winding-up petitions expire.

COMMENT: whilst this has to end at some point, to remove this protection before the return to the social and business trading norm, anticipated in June at the very earliest, seems premature. This has the capability to overwhelm businesses and the already strained Court system before recovery has fully recommenced. This needs to be extended to at least give business a chance to trade without lockdown constraints and repay accrued debts. 

Summary

Keeping track of when the myriad of financial support and protective measures brought in to assist businesses during lockdown expire is a full time job in itself, but businesses need to know when they will be removed and essentially what effect it will have, if any, on their business.

Their removal may effect a business directly or indirectly through key business stakeholders whether shareholder, business partner, employee, funder, customer or through the supply chain. This needs to be anticipated and factored into any restart plan and constantly reviewed as part of the business plan and ideally, with contingency plans for each eventuality.