Q&As

Coronavirus (COVID-19)—do the furlough provisions apply to company directors and members of LLPs?

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Published on LexisPSL on 14/04/2020

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  • Coronavirus (COVID-19)—do the furlough provisions apply to company directors and members of LLPs?

Coronavirus (COVID-19)—do the furlough provisions apply to company directors and members of LLPs?

The Coronavirus (COVID-19) Job Retention Scheme (CJRS) is a temporary scheme in place for three months starting from 1 March 2020, but it may be extended if necessary and employers can use this scheme anytime during this period (see Practice Note: Coronavirus Job Retention Scheme (original version to 30 June 2020) and also the official guidance for employers and guidance for employees.

Office holders can be furloughed and receive support through the CJRS.

The furlough, and any ongoing payment during furlough, will need to be agreed between the office holder and the party who operates PAYE on the income they receive for holding their office.

Where the office holder is a company director or member of a limited liability partnership (LLP), the furlough arrangements should be adopted formally as a decision of the company or LLP.

Company directors

As office holders, salaried company directors are eligible to be furloughed and receive support through the CJRS.

Company directors owe duties to their company which are set out in the Companies Act 2006 (see Practice Note: Directors' duties—a quick guide). Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed.

Where one or more individual directors’

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