Corporate law update: 9 - 15 May

This week: 

• The King’s Speech is delivered – we cover the key corporate law aspects

• The High Court finds that events taking place after the date of signing an SPA could not be taken into account when calculating damages for breach of warranty

• New legislation is made to expand automatic corporate liability for the criminal acts of senior managers

• Other items of interest

King’s Speech: corporate law aspects

King Charles III delivered his speech on 13 May 2026, setting out the Government’s legislative agenda for the next session of Parliament.

From a corporate law perspective, the key items are as follows.

• Payments to small businesses. Building on the UK’s existing regime for reporting on invoice payment practices, the Government intends to introduce a Small Business Protections (Late Payments) Bill to further tackle late payments to small businesses. The measures mirror those set out by the Government in its previous policy paper, “Time to pay up”.  You can read more about the Government’s proposals to tackle late payment of invoices in our previous Corporate Law Update.

• Improvements to merger control. The Government intends to introduce a Competition Reform Bill to make competition investigations (including merger control decisions) by the Competition and Markets Authority (CMA) quicker and more predictable. The measures follow from the Government’s earlier consultation in January this year. You can read our previous article for more about the Government’s consultation on refining the UK competition regime.

• Political donations.  The Government intends to pursue the Representation of the People Bill, introduced last Parliament, to enact several electoral reforms. These include tightening restrictions around who can make political donations to registered political parties in the UK by introducing new tests around control and accounts for companies that wish to make donations. (The new measures are separate from, but will need to be considered alongside, existing requirements in the Companies Act 2006 relating to political donations and political expenditure.)

Read the King’s Speech 2026

Read the briefing notes to the King’s Speech 2026 (opens PDF)

New legislation expands corporate liability for senior managers' criminal acts

New legislation has been passed which, from 29 June 2026, will expand the statutory regime under which a body corporate or partnership is automatically criminally liable for criminal acts of its senior managers.

Under section 196 of the Economic Crime and Corporate Transparency Act 2023, where a "senior manager" of a body corporate or partnership (an organisation) commits one of certain specified criminal offences while acting within the scope of their authority, the organisation also automatically commits a criminal offence.

This is sometimes known colloquially as the “statutory identification doctrine”.

Section 196 applies only to certain offences committed on or after 26 December 2023. These include fraud, bribery, theft, false accounting, counterfeiting, certain tax offences, certain financial promotion and securities law offences, and certain money laundering and sanctions offences.

With effect from 29 June 2026, section 250 of the Crime and Policing Act 2026 replaces section 196 and extends the doctrine to all criminal offences under the law of England and Wales, Scotland or Northern Ireland. In effect, section 250 will make an organisation automatically criminally liable for any criminal offence committed by one of its senior officers while acting in that capacity.

Following the introduction of section 196, many organisations will have put in place policies and procedures, or strengthened existing policies and procedures, to identify potential offences and so guard against the risk of corporate liability. These organisations will now need to review those policies to ensure they are sufficiently robust to cover any criminal offence.

Read section 250 of the Crime and Policing Act 2026 

Loss for breach of warranty measured as at date warranty given

The High Court has held that, on a claim for breach of warranties in a share sale and purchase agreement (SPA), the buyer’s loss was to be measured by reference to events at the time the warranty was given (i.e. signing).

In particular, the court was not permitted to take into account events taking place after signing that were not initiated by the buyer but which resulted in some element of recovery for the target company.

ETL Holdings (UK) Ltd v Munn and anor [2026] EWHC 860 (Ch) concerned the acquisition of 40% of the shares in a company from two of its founders, with the founders retaining shares in the target.

Contrary to the warranties given in the SPA, following the sale, it was discovered that, as a result of certain transactions and distributions that were later declared void, the target company owed a debt of just over £3m to one of its subsidiaries. That subsidiary later entered liquidation, and the liquidator enforced the debt against the target company.

The company target subsequently compromised the debt owed to its subsidiary, resulting in some writing-off of the debt. The target company also brought a claim against one of its directors for breach of duty and to recover part of an unlawful distribution, which it realised by forfeiting the director’s shares in the company and selling them off.

These actions, in part, resulted in some recovery to the target company and, therefore, indirectly to the buyer through the value of its shareholding in the target company.

However, the court found that, as these actions took place after the warranty was given, they could not be taken into account in calculating the buyer’s loss.

The court said that, from the point of signing, the buyer took the benefit of any windfall from events that occurred after it. The buyer’s loss had to be measured strictly by reference to events as they stood at signing of the SPA.

This decision was reinforced by the fact that the events resulting in the recovery were actions taken by the target company, rather than the buyer, and so it was difficult to see how they could amount to mitigating action taken by the buyer. The decision arguably may have been different if the buyer itself had taken (or been able to take) some action intended to mitigate its loss.

The case is an important reminder of the principles on which damages for breach of warranty will be calculated.

Access the High Court’s decision in ETL Holdings (UK) Ltd v Munn [2026] EWHC 860 (Ch) on calculation of damages for breach of warranty in an SPA

Other items this week

• UK Private Capital Investment Activity Report. UK Private Capital has published its annual Report on Investment Activity for 2025. The report notes that UK private capital fundraising rose to £58.7bn in 2025, up from £34.8bn in 2024, with buyout funds accounting for £51.7bn of the total.  £25bn was invested into 1,434 UK companies, down from £31.4bn in 2024 but still above 2023 and the 2010s annual average. Exits were active, with 610 UK companies divested at a total exit cost of £6.07bn, principally through trade sales and sales to other Private Equity firms.

  Read UK Private Capital’s Report on Investment Activity 2025 (opens PDF)

• Companies House to review historic record retention policy. Companies House has announced that it is reviewing its retention period for dissolved company records.  Currently, Companies House holds a company’s records for 20 years after its dissolution, following which it transfers selected records to the appropriate Public Records Office (in England and Wales, the National Archives). Any remaining records are destroyed. During the review and pending any subsequent public consultation, Companies House has suspended the destruction and transfer of dissolved company records.

  Read Companies House’s news story on retaining dissolved company records