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Welcome to the latest edition of Corporate Update.

Corporate Update is our fortnightly bulletin offering a quick read of the latest developments which we consider relevant to corporate counsel. Please get in touch with your usual contact or any of the contacts listed below if you want to explore any of the topics covered in more detail. If you would like to subscribe to this bulletin as a regular email, please click here.

Publications

April action plan: the latest Employment Rights Act 2025 reforms

As part of our Horizon Scanning Series, we have published a briefing on the reforms expected to come into force under the Employment Rights Act 2025 in April 2026. These reforms will introduce a series of significant changes for employers, including easier trade union recognition, tougher collective redundancy penalties and expanded day-one rights for paternity leave. The briefing sets out the most important changes and provides practical advice for employers on how to prepare.

Timeline of recent and anticipated ESG developments in 2026

We have published a timeline of recent and anticipated ESG developments in the UK and EU. It maps developments from mid-2025 through 2026 (as of March 2026). Although many of the anticipated developments in 2026 are currently provisional, we will publish further updates as these developments crystalise into policy or regulatory action.

EU Foreign Subsidies Regime: emerging trends shaping deals in 2026

The EU Foreign Subsidies Regulation (“FSR”), which came into force in January 2023, is intended to address distortions in the EU internal market caused by foreign subsidies. It is a mandatory, suspensory regime for M&A (including joint venture) transactions and public tenders above certain financial thresholds and has become a significant review process for in-scope M&A transactions. We have published a briefing exploring the European Commission’s approach since the FSR came into force and providing an outlook for companies in 2026.

News

FTSE UK Index Series: free float requirement for non-UK companies to be reduced to 10%  

On 26 March 2026, FTSE Russell announced that, effective from its June 2026 review, it will align free float requirements for UK and non-UK incorporated companies at 10%, reducing the threshold for overseas issuers from 25%. This removes a key structural distinction between domestic and international companies and is intended to improve index representativeness. From the index review cut-off date on 2 June 2026, UK and non-UK incorporated companies with a minimum free float of 10% will be eligible for inclusion to the FTSE UK Index Series, subject to satisfying all other inclusion criteria.

The change builds on earlier reforms, including permitting securities trading in US dollars or Euros and lowering ‘fast entry’ thresholds for large IPOs (see Corporate Update Bulletin - 3 April 2025). Together, these measures are designed to enhance the attractiveness of UK capital markets and ensure the timely inclusion of significant new listings.

Companies House publishes update on WebFiling security incident

Companies House has published detailed guidance and updates on the WebFiling security issue identified on 13 March 2026, including advice for affected companies. The issue meant that a logged-in WebFiling user could, in limited circumstances, access and potentially change another company’s details (see Corporate Update Bulletin - 19 March 2026).

In its updated guidance, Companies House confirms that passwords and identity verification data were not compromised, existing filings could not be altered and large-scale data extraction was not possible.

Nonetheless, Companies House advises all companies to review their filing history and report any discrepancies. It also advises companies who missed a filing deadline as a result of the incident to make their filing as soon as possible, keep a record of the date and time they tried to access the service and use Companies House’ online penalty appeals notice to appeal any penalty they may have received. Companies House will consider evidence of failed filing attempts, including screenshots and timestamps.

Government confirms late payment reforms

On 24 March 2026, the government published its response to its consultation on late payments, confirming that it will implement reforms to tackle late payments and increase transparency around large companies’ payment practices. The government has stated that it is committed to tackling the problem of late payments, which according to its research causes the closure of 38 businesses per day and costs the UK economy £11 billion per year. The reforms form part of a wider policy objective to address poor payment culture in UK supply chains. According to the press release and written statement from the Department for Business and Trade, key measures are likely to include:

  • a maximum 60-day payment term, subject to limited exceptions;
  • automatic statutory interest on late payments;
  • enhanced enforcement powers for the Small Business Commissioner, including financial penalties;
  • a 30-day deadline to raise invoice disputes; and
  • expanded reporting requirements, including greater board-level accountability for payment practices.

The Minister for Small Business and Economic Transformation has recommended various actions businesses should take to prepare for these changes, including updating payment terms, systems and internal governance.

Government consultation on a future UK corporate re‑domiciliation regime

On 25 March 2026, the Department for Business and Trade launched a public consultation on proposals for a corporate re‑domiciliation regime that would allow foreign companies to re‑domicile to the UK without changing their legal identity.

Under current UK law, foreign companies wishing to establish a UK presence must create a new UK legal entity and transfer assets, contracts and operations into it. The proposed re‑domiciliation regime would remove this barrier, enabling foreign companies to de-register from their current jurisdiction and become registered as a UK company more or less simultaneously.

The consultation document and accompanying analytical paper set out detailed proposals for the regime’s operation, including:

  • eligibility criteria and application process for re‑domiciliation via Companies House;
  • interaction with UK tax, accounting and regulatory requirements, noting changes that may be needed to align foreign re‑domiciled companies with UK standards; and
  • consultation questions on detailed operational and legal design aspects, informed by the last government’s 2021 consultation and an Independent Expert Panel report from 2024.

Corporate civil enforcement reform: consultation signals expanded director accountability

On 25 March 2026, the UK government launched a wide‑ranging consultation on proposed reforms to the corporate civil enforcement regime. The consultation, open until 16 June 2026, considers strengthening powers around director disqualification and the winding up of companies.

The proposals build on recent enforcement trends and reflect concern about misuse of corporate structures, particularly in cases involving insolvency or misconduct. The consultation sets out eleven reform options, grouped into three categories:  

  • structural reforms to tailor enforcement action, including new director restrictions for less serious breaches, faster director bans following public-interest wind-ups and the transfer of decision-making for disqualification to the Secretary of State;
  • enhanced information gathering powers, including the power to request information from directors of solvent companies before initiating disqualification proceedings; and
  • improvements to the current procedure for director disqualification, including replacing affidavits with standard witness statements, allowing electronic service of documents and extending limitation periods in complex cases.

While still at an early stage, the proposals point towards a more assertive and flexible enforcement landscape.

Public offers: FCA refines prospectus regime rules

On 27 March 2026, the FCA published Handbook Notice 139 which sets out changes that have been made by the Prospectus Rules (Miscellaneous Amendments) Instrument 2026.

The Instrument updates the Prospectus Rules: Admission to Trading on a Regulated Market sourcebook (PRM) (“PRM”) which came into force on 19 January 2026 as part of the new Public Offers and Admission to Trading (“POAT”) regime.

The Instrument introduces two narrow but useful changes. First, subject to certain conditions, issuers will be able to forward‑incorporate a broader range of information into a base prospectus. This will allow future, periodic financial information to be incorporated by reference, reducing the need for supplementary prospectuses.

Second, the FCA will introduce a National Storage Mechanism (“NSM”) filing requirement for notifications made under existing PRM rules that require publication via a Primary Information Provider (“PIP”). As PIPs already tend to file these notifications in the NSM voluntarily, the FCA does not believe that the change will meaningfully increase workloads. A new headline code will be added to the DTR sourcebook to standardise how such filings are categorised.

Government responds on mandatory ethnicity and disability pay gap reporting

On 25 March 2026, the Office for Equality and Opportunity published a response to its earlier consultation on ethnicity and disability pay gap reporting, confirming the government’s intention to introduce mandatory reporting for employers with 250 or more employees.

Under the new rules, large employers will be required to disclose their ethnicity and disability pay gaps, provide breakdowns of their workforce by ethnicity and disability (“workforce reporting”), state the proportion of staff who have shared this information (“declaration rates”), and outline measures being taken to close any pay gaps.

The response includes draft clauses to show how the future legislation will work in practice. The response does not lay out a timetable, but states that the government will continue to develop the primary legislation and supporting regulations required. It also promises that guidance will be developed, including advice on actions to address ethnicity and disability pay gaps.

Legislation

Finance Bill 2025-2026 receives Royal Assent

On 18 March 2026 the Finance Act 2026 passed into law. The Act brings a number of measures from the Autumn Budget 2025 into force, including changes to reliefs, new anti-avoidance rules and a sharpening of HMRC’s administrative powers. For a full analysis of these changes, please refer to our Autumn Budget 2025 Hub.

Case law

No causal link required between director misconduct and insolvency

The High Court’s decision in Secretary of State for Business and Trade v Greensill [2026] EWHC 639 (CH) provides important clarification on the interaction between sections 6(1)(a) and 6(1)(b) of the Company Directors Disqualification Act 1986 (“CDDA 1986”), with implications for how director unfitness is assessed and pleaded in disqualification proceedings.

Section 6(1) CDDA 1986 provides that the court shall disqualify an individual from being a director where it is satisfied that: (a) the individual is or has been a director of a company which (i) has become insolvent or (ii) has been dissolved without being insolvent; and (b) the individual’s conduct as director makes them unfit to be concerned in the management of a company.

Dismissing the defendant’s strike-out application, the judge held that section 6(1) does not require the the Secretary of State to prove that the relevant conduct caused the company’s insolvency. In particular, he found that sections 6(1)(a) and 6(1)(b) were freestanding preconditions, and that section 6(1)(a)(ii), which enables proceedings against a director of a company that has been dissolved without becoming insolvent, was inconsistent with the defendant’s argument.

The judgement serves as a reminder that directors can be disqualified under section 6 CDDA even where their misconduct did not cause the company’s insolvency.

Contract termination: Court of Appeal clarifies indefinite arrangement

The Court of Appeal ruled in Zaha Hadid Ltd v The Zaha Hadid Foundation [2026] EWCA Civ 192 that a trademark licence described as lasting 'indefinitely' could be terminated by either side on reasonable notice, even though the contract only gave one side a specific right to terminate.

The dispute concerned a contract between Zara Hadid’s estate company and charitable foundation which stated that it would continue ‘indefinitely unless terminated earlier in accordance with this [termination] clause’ and which gave the foundation, but not the company, the express right to terminate.

At first instance, the High Court held that the company was not entitled to terminate the contract, since the contract contained no express right for it do so. The Court of Appeal, however, applied a two-step approach from Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC 173. On the facts, it found that both parties could end the contract on reasonable notice because:

  • as a matter of construction, the parties did not intend the licence to last forever; and
  • to fulfil that intention, a power to terminate at the request of either party should be inferred.

The court's decision indicates a surprising readiness to help parties facing unilateral termination rights, despite its usual reluctance to intervene in unfair deals.  

Court of Appeal confirms presumption of concurrent obligations where payment is ‘subject to’ delivery of transfer

The Court of Appeal’s decision in Textor v Iconic Sports Eagle Investment LLC [2026] EWCA Civ 355  clarifies the default position on payment and delivery obligations in share sale agreements, with important implications for how completion mechanics are drafted and enforced in corporate transactions.

The case concerned a put option agreement under which Iconic could require Textor to purchase some or all of Iconic’s shares in a multi-club sports holding company. Textor argued that its obligation to pay was conditional on Iconic first delivering transfer documents (including a duly completed stock transfer form and a share certificate), based on wording that payment was ‘subject to’ such delivery. The Court of Appeal unanimously rejected this argument and upheld the first instance decision.

Among other things, the Court confirmed that:

  • there is a strong presumption that payment and delivery in share sales are concurrent conditions, reflecting the commercial nature of completion as an exchange;
  • clear and explicit language is required to displace this presumption, meaning that standard formulations such as ‘subject to’ will generally be insufficient; and  
  • contractual provisions should be read holistically and in their commercial context, including how completion is defined and how default provisions operate.

The decision reinforces that, absent clear drafting, neither party is required to perform first or assume the risk of the other’s non-performance.

High Court finds breach where director undermines board-approved transaction

The High Court’s decision in Gardner Aerospace Holdings Ltd & Anor v Upton [2026] EWHC 555 (Ch) (20 March 2026) confirms that directors will breach their duties where they act covertly to undermine a board-approved transaction, even if motivated by personal views on strategy or external factors such as national security.

The case concerned a former director and interim CEO who, despite publicly supporting a refinancing transaction, privately lobbied government and third parties to frustrate it, without board authorisation or disclosure. The Court found multiple breaches of duty under the Companies Act 2006, including:

  • section 171 (proper purposes) – the director used his power to undermine, rather than implement, board decisions;
  • section 172 (duty to promote the success of the company) – the director did not act in good faith in the company’s interests, instead pursuing a course ‘he knew would undermine’ the transaction; and
  • section 175 (conflicts of interest) – the director placed himself in a position of conflict, including acting to advance his own employment prospects.

In handing down this judgement, the Court emphasised that directors must act consistently with collective board decisions and should not pursue parallel, undisclosed strategies.