Legal Update - Business Action Plan for Survival
Management Accounts
Are you preparing regular financial information in the correct form to enable you to take business decisions regarding future trading activity?
Directors not personally skilled in this area are required to obtain appropriate professional advice and if they do not they risk personal liability in a subsequent insolvency.
Debt Collection
Are you going about the collection of overdue debts in the right way? Is it a question of won’t pay or can’t pay?
The Late Payment of Commercial Debts Regulations 2002 enable businesses of any size to charge a fee and statutory interest - unless the contract provides for interest - on outstanding debts.
Directors
Are all procedural formalities for any dealings or significant transactions with directors being satisfied?
It is a legal requirement that directors with an interest in any business transacted with the company disclose that interest formally and substantial transactions often require the prior approval of the company’s shareholders.
Terms of Business
Do you have appropriate standard terms of business and are these being incorporated into your contractual dealings with customers?
In the absence of formal terms of business the law will address certain but not all of the issues that are important to the management of commercial risk. An order placed on the buyer’s terms of business can easily and will often knock out any terms that were proposed with the estimate/quote.
Retention of Title
Is it appropriate to reserve title to any goods (including intellectual property rights) that are being supplied until payment in full has been made?
To be effective in law retention of title clauses need to be well drafted, clearly incorporated into the contract and should reserve not only title to the goods but also the right to recover them.
For any further advice on the above please contact:
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