Corporate weekly highlights—13 September 2018

Corporate weekly highlights—13 September 2018

This week’s edition of Corporate highlights includes news of the draft Business Contract Terms (Assignment of Receivables) Regulations 2018, which will protect small businesses against unfair contracts that stop them raising money from unpaid invoices, in addition to further News Analysis on the government’s response to the BEIS consultation on insolvency and corporate governance.

In this issue:

Accounts and reports

Insolvency for corporate lawyers; Corporate governance; Share capital

Additional news—daily and weekly news alerts

Dates for your diary

Trackers

Useful information

Accounts and reports

New measures to boost funding for small businesses proposed

The Department for Business, Energy and Industrial Strategy (BEIS) has announced new measures to help small businesses access invoice finance, which are expected to provide a £1bn long-term boost to the economy. The draft Business Contract Terms (Assignment of Receivables) Regulations 2018 will protect small businesses against unfair contracts that stop them raising money from unpaid invoices. Small Business Minister, Kelly Tolhurst, said the plans will ensure small businesses have a ‘level playing field from which to set fair contracts with the businesses they supply’.

The proposed legal changes follow a number of larger businesses preventing their suppliers from assigning receivables—the right to receive proceeds from unpaid invoices—to a finance provider in exchange for an advance of funds, typically 80% of the invoice value. The initial advance is received within a few days and the balancing 20% (less fees and charges) is paid to the supplier when the customer settles the invoice.

Currently, a small supplier’s contract with a large company may prevent it from securing invoice finance from providers such as banks. The proposed statutory instrument would mean that contractual restrictions of this nature entered into on or after 31 December 2018 would, with certain exceptions, have no effect and could be disregarded. This will help prevent large businesses from abusing their strong

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