New requirements for pre packaged Administration sales to come into force from 30 April 2021

Under the snappily entitled ‘Administration (Restrictions on Disposal etc to Connected Persons) Regulations 2021’ an Administrator must not make a substantial disposal of a company’s assets or business to a connected party within 8 weeks of their appointment unless either:

  1. The company’s creditors have approved of the disposal; or
  2. A ‘qualifying report’ in respect of the making of the disposal has been obtained.

As creditor approval will, as a consequence of the Administration procedure itself, usually only be obtained some time after the Administration appointment, the second option will become the default where a pre packaged sale is being considered.

The Regulations only apply to a disposal to a ‘connected person’ such as a director or shadow director of the company in Administration or an ‘associate’ of such person or the company itself.

 Much of the debate on the Regulations has focussed on the requisite qualifications for the ‘evaluator’ preparing the ‘qualifying report’. The Regulations state that an evaluator is an individual who-:

‘..is satisfied that their relevant knowledge and experience is sufficient for the purposes of making a qualifying report”

The bar would therefore appear to be set fairly low with the evaluator’s opinion of their own competence and experience being the main qualification. It is, however, also a requirement that they have suitable professional indemnity insurance in place which might provide some commercial constraints on inappropriate individuals trying to enter the market.

For more details, please contact Jon Law at SWBR

Four in five small business owners suffering poor mental health

Rest assured that you are not alone if you are having sleepless nights worrying about what the future holds as the current Covid pandemic continues to affect business owners.

New research has revealed that four in five small business owners report experiencing common symptoms of poor mental health at least a few times a year says Mental Health UK.  Inability to focus is most commonly reported by small business owners, followed by anxiety, disrupted sleep, panic attacks with over a third reporting symptoms of depression.

The ongoing Covid-19 crisis appears to be exacerbating these problems amongst small business owners. When asked whether they’ve experienced issues with their mental health since the pandemic began, over one third (35%) have experienced panic attacks and half have experienced symptoms of depression. More than three quarters (78%) of SME owners said they’ve been worried about cash flow during the pandemic – the most significant concern out of all the respondents.

The mental health of small business owners’ risks getting worse without support and an understanding of what they can do and what options there are.

Brian Dow, Chief Executive of Mental Health UK, said “It’s an incredibly tough time for small business owners, with increasing economic uncertainty and disruption impacting not only the health of their business, but also their own wellbeing and resilience as they try to weather the storm.”

If you are concerned and are worried that your health is being affected then please pick up the phone for a chat with a qualified professional at SWBR. It won’t cost you a penny and could result in some much-needed peace of mind. Knowledge is everything and you could just find that understanding what options you have could result in a better night’s sleep for the first time in a long time.