What to do with business during quarantine or forced downtime?
At a time when an outbreak of the epidemic is raging in our country, many business spheres have already stopped their activities in response to the government’s demand to provide employees with the opportunity to isolate themselves and avoid contacting each other.
Which areas of business in Ukraine have suffered and will continue to suffer losses amounting to at least one quarterly revenue?
The following types of business have suspended their operations for the period of quarantine:
- Restaurants and cafes;
- Shopping and entertainment centres, cinemas and exhibitions;
- Airlines have cut their flights by more than 70%;
- Passenger transportations has been almost entirely suspended;
- Fitness clubs and travel agencies have been shut down.
Today we will talk about the urgent actions that every small and medium business can take to reduce potential losses and restore its work in the future.
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Government support for business: What to expect?
Due to this situation, the government decided to support medium and small businesses. The method of support is draft law No. 3220, which provides certain benefits to various areas of activity. The benefits mainly concern taxation, fines, penalties and shift of the compulsory registration of cash registers.
You can read more about the penalties and simplification of the taxation system here.
Unfortunately, the isolation of large, medium and small businesses can take much longer than the specified month, so even despite the efforts of the authorities, you will also have to take care of your business. Especially if you work in the sphere that is not considered strategically important.
What do our lawyers offer to support the functioning of your business?
1. It’s time to think about and get all the information you need for future activities. We have been rendering services to business for a long time and we understand that usually there is no time to address important but not urgent issues - finalization of a model agreement with a supplier or a client, offers, employment agreements, non-disclosure agreements, etc. You know that they are important from the point of view of competition, security, development prospects, but you constantly postpone this work. Perhaps now is the time to finalize these issues?
Spend this time for the benefit of your business - prepare for the future restoration of normal commercial life today.
2. Make sure your employees get quarantined properly. This will ensure not only their safety, but also save your business from potential problems with state regulatory authorities.
We offer a complete package of correctly executed human resources and labor documentation for your business.
3. Consult a lawyer on force majeure and a possible obtainment of the certificate of substantial change in circumstances.
Our team can advice online on any legal issues regarding how to save your business in the current circumstances and what to do with the business after a downtime.
If you understand that due to the current situation you violate the agreements concluded with your counterparties, it is worth considering whether the concept of force majeure and hardship can be applied to the situation.
Our lawyers can assess your situation and help you obtain the necessary information from the Ukrainian Chamber of Commerce and Industry.
4. Learn about how to better support your business financially.
Today, a large number of entrepreneurs are thinking about how to financially support their business that is closed under the latest quarantine rules or is suffering losses due to a reduced number of clients. This means you should think how to get money to the firm and to properly arrange the process in terms of taxes and the prospects for their further withdrawal.
Many make a choice in favor of reimbursable financial assistance. Of course, you can face a whole bunch of problems if the process is not correctly formalized. For example, reimbursable financial assistance shall be documented by the agreement, which should stipulate that financial assistance is reimbursable, interest-free, and shall be returned within 12 months.
However, if you decide to document this assistance as non-refundable, the tax authority will consider it a profit and you will need to pay taxes. Problems can also arise when the financial assistance is subject to an interest charge or it is overdue.
But this is not the only problem. Practice shows that financial assistance (especially large amounts) creates some problems when it is returned. Banks have tightened their monitoring rules and therefore the person that deposits the funds will have to prove their origin when getting them back.
We can offer you the best options for providing financial support to your business.
5. Think about additional agreements with contractors. Against the background of the introduction of quarantine, many of the entrepreneurs agree with counterparties to change the basic terms and conditions of their agreements (for example, the lease agreement or the agreement for supply and delivery of goods, etc.) or to postpone the fulfillment of such agreements.
It should be remembered that such additional agreements should be legally correct, so that you do not have any problems after quarantine and recovery of the activity.
6. Spend your free time to obtain the necessary documents. If you have previously thought about obtaining any license to conduct further activities or expand your business, it is the right time now.
Our lawyers are constantly monitoring the work of state licensing authorities and can both prepare your documents and submit them.
The same applies to transactions, which require a notary’s involvement. Today, most notary offices in Ukraine are closed, but we can organize for you a meeting with a notary to solve your legal problems.
If your business has suffered heavy losses or stopped its activity due to quarantine in Ukraine - contact us. We will provide you with all the information you need for further operation.