The COVID-19 pandemic has affected every area of the way we live. And at the moment, we are not sure how long our changed circumstances will last, or what the legacy of this disease will be.
One group in society most obviously and directly affected has been those who operate businesses. Shut-downs, stand-downs, and the sudden disappearance or inactivity of customers and clients has had – and continues to have – a dramatic and damaging affect on business owners and operators.
As a law firm embedded in its community, with many long-term relationships with valued business clients, we at Felicio Law Firm are particularly aware of the challenges our friends are facing. We are here to help during this unprecedented time, which the subject of this article is addressed to.
How we can help
With many business clients facing severely reduced revenue and even insolvency, it’s important for them to know that there are legal options which are affordable, accessible and effective in helping protect and aid their business during this trying time. But these options do require placing your trust in us by providing necessary information we can utilise to assess your business position and what might be done to ensure it survives the pandemic.
Some of the records we might request in order to give you informed legal advice on your options might include:
- Details on the business’ current operations, including active contracts, and any planned acquisitions or divestitures.
- The company’s most recent financial statements. The most important details within these are:
- a depreciation schedule, if available;
- any recent valuations relating to plant, equipment and intellectual property owned by the business;
- debtors’ and creditors’ ledger;
- details of related party creditors;
- current balances in all business-related bank accounts;
- details on employee entitlements.
- Whether any payment arrangements have been entered into between the business and other agencies, such as the Australian Taxation Office (ATO).
- ATO balance and income tax account details.
Provision of these details by your business’ financial adviser is certainly a great start in helping us understand the financial position of the enterprise and our capacity to suggest useful legal avenues for protecting your position.
What else could be provided?
In addition to those documents listed above, our legal help can be provided where a director of a business may have provided a personal guarantee in order to make sure the business meets its debt and financing obligations.
This process may require you to furnish us with the details of any insurance policies held by the company, particularly those that relate to the liabilities of directors and other company officers.
In these times of economic contraction, it’s advisable our business clients contact us as soon as possible if they receive any statements of claim, default judgement or applications to wind up as part of insolvency proceedings. Equally, if there are creditors of the business demanding payment, provide us with details of any payments made as soon as you’re able.
At Felicio we can help where the business has secured creditors. By providing us with information on the amounts owing to secured creditors, the extent of the charge they hold, and any details of repayment plans to meet obligations, we can help advise on cost effective ways to protect your business.
Likewise, where suppliers retain title over stock or goods of the business which are registered on the Personal Property Security Register (PPSR), or there are rental assets held by the business which may be subject to charges by the bailor under the PPSR, we can help you understand the legal position. This will require you providing details on current rental/lease agreements held by the business, including the lease period and the amount and frequency of repayments.
Why legal advice is crucial
These are trying times. Many experienced economic commentators have openly predicted many businesses won’t survive the effects of the global downturn caused by COVID-19.
Many businesses are also unaware of their legal rights and obligations, or what they can legally do to protect their interests. We understand all of these issues and are here to help our business clients through these difficult times.
Call us today (02) 4365 4249 for an initial consultation to discuss any of the issues raised in this article. Our firm is dedicated to long-term relationships with clients where we listen with compassion and understanding and then act in your best interest to ensure your business is protected.