Despite the possibility that Britain could vote to leave the EU on 23 June, it seems that many businesses have not fully prepared themselves for what Brexit could mean for them going forward if the Brexit campaign ends up winning on the day.
This is an especially important consideration for businesses in the North East, as there are many projects and funding streams related to the EU across our region and their potential disappearance would have a direct and tangible impact on the people and businesses involved with them.
Business decisions made during the campaign and aftermath of the vote are likely to be scrutinised very closely in the event that a business becomes distressed even partly as a result of having failed to plan for either referendum outcome.
Whatever the result, it is vital that businesses are able to show they were cautious about any big strategic decisions – anything outside their day to day business activities – during this uncertain period.
The impact of the uncertainty caused by the referendum has been made starkly clear by the volatility in the FTSE 100 Index over recent days, and business and investor confidence is likely to continue to be in a state of flux for a time whatever the outcome. So if you are entering major new contracts or markets in, say, the next six months, it is essential that you have a contingency plan.
If it’s crucial that such big decisions are made now, you ideally need to be able to produce internal records and/or notes of external advice taken, created at the relevant time, to back up your reasons for doing so.
If you had board meetings or other discussions even months ago when the implications of Brexit were discussed, ensure that you keep appropriate minutes or other records of those discussions.
Directors also need to be mindful of any comments made in the public domain before the result. If you’ve been quoted in public or on social media with a position or prediction, these may well be quoted back at you if your business were to fail. Does your business planning reflect those views?
If in doubt about the viability of a particular strategic decision after the referendum, it makes sense for businesses to take professional advice at an early stage so they are able to demonstrate that appropriate measures were adopted at all times.
For further information, please contact Neil Harrold, Partner at Hay & Kilner
Call: 0191 232 8345