Companies Act 2014 section 271A

Early warning tools

Section 271A permits directors to use early warning tools — mechanisms designed to detect emerging financial difficulties, identify available restructuring options, and prompt timely action.

• Directors may have regard to early warning tools when monitoring their company's financial position
• An early warning tool is a mechanism that alerts directors to circumstances that could make the company unable to pay its debts
• The tool should identify restructuring frameworks available to the company
• The tool should signal to directors the need to act without delay when financial difficulties are emerging