A practical guide to governance, structuring, and risk mitigation
Editorial & Legal Disclaimer
This article is prepared solely for educational and informational purposes.
It is based on publicly available information, court records, and regulatory disclosures.
No assumptions, allegations, or conclusions are made beyond publicly reported facts.
This content does not intend to defame, accuse, or speculate about any individual or entity.
The objective is to extract business, governance, and risk-management lessons relevant to entrepreneurs and investors.
1: Background: why this case matters
R. Shetty founded NMC Health, which grew from a single clinic into a multinational healthcare provider and later became a UK-listed public company.
In 2020, NMC Health entered UK administration following disclosures of previously unreported financial liabilities. The business was subsequently restructured and ownership changed, while healthcare operations continued under new control.
This case is widely referenced not because of its size, but because it highlights structural risks that affect businesses of all sizes, including small and mid-sized enterprises.
2: Why small businesses should pay attention
Many entrepreneurs believe such events only happen to large corporations.
In reality, the same risk patterns appear more frequently and more quickly in small businesses, because they often have:
- Fewer controls
- Higher dependence on founder decisions
- Limited advisory support
- Greater personal exposure
The scale may differ — the mechanics do not.
3: What went wrong (high-level, non-controversial)
This section focuses on process and structure, not intent or blame.
Governance gaps
- Rapid expansion without proportional strengthening of controls
- Weak segregation between management decisions and oversight
- Limited independent verification of financial exposure
Financial risk concentration
- Heavy reliance on borrowed capital
- Exposure to liquidity stress once lender confidence declined
- Complex funding structures that became difficult to manage
Founder exposure
- Personal guarantees linked individual wealth to corporate debt
- Breakdown of separation between personal and business risk
These are structural lessons, applicable to businesses at any stage.
4: Core lessons for entrepreneurs — the DO’s
Build governance early (even if small)
Governance does not mean bureaucracy.
It means:
- Clear approval limits
- Independent financial review
- Documented decision-making
A business should be able to function without the founder’s constant intervention.
Focus on cash, not just profit
Profit does not equal safety.
Always monitor:
- Real bank balances
- Loan repayment schedules
- Upcoming obligations
Liquidity stress is usually visible long before collapse.
Separate personal and business risk
One of the strongest lessons from this case is the danger of blurred boundaries.
- Avoid unlimited personal guarantees
- Ring-fence operating risk
- Use layered structures where appropriate
The purpose of a company is risk containment, not risk transfer to the founder.
Slow growth if funding quality is weak
Growth funded by fragile debt structures is unstable.
Sustainable growth is supported by:
- Predictable cash flow
- Transparent financing
- Conservative leverage
5: Core lessons — the DON’Ts
Don’t rely on reputation alone
Past success does not replace:
- Controls
- Documentation
- Independent oversight
Trust without verification is fragile.
Don’t treat companies as personal extensions
When decision-making, finances, and guarantees are overly personalised:
- Controls weaken
- Accountability blurs
- Personal exposure increases
A company must be structured to survive beyond the founder.
Don’t ignore early warning signs
Common warning signals include:
- Frequent refinancing
- Delayed financial reporting
- Increasing lender scrutiny
Early action prevents irreversible outcomes.
6: Why structure matters more than size
Many risks can be mitigated before they appear through proper structuring.
Holding companies
A holding company:
- Owns shares of operating businesses
- Does not run day-to-day operations
- Acts as a control and protection layer
This separation helps:
- Contain operational risk
- Improve transparency
- Protect long-term value
7: Why foundations are relevant — even for small businesses
Foundations are no longer limited to ultra-high-net-worth families.
When designed correctly, they can:
- Hold shares of holding companies
- Protect assets from operational risk
- Support succession and continuity
- Reduce emotionally driven decisions
The value lies in governance design, not company size.
8: Importance of English Common Law–based frameworks
Legal certainty is a risk-management decision, not a branding choice.
Structures governed by English Common Law principles are often preferred due to:
- Predictable interpretation
- Strong contractual enforcement
- International recognition
This is why many international structures use:
- DIFC
- ADGM
- Carefully drafted offshore structures with common-law jurisdiction clauses
9: DIFC, ADGM, and RAK ICC
Entities established in Dubai International Financial Centre and Abu Dhabi Global Market operate directly under English Common Law–based court systems, offering clarity and predictability.
RAK ICC
RAK International Corporate Centre (RAK ICC) is an offshore registry and does not operate its own court system.
However, RAK ICC entities can expressly elect governing law and dispute resolution forums — including the DIFC Courts — through their constitutional documents and contracts.
This allows:
- Offshore efficiency
- Asset segregation
- Access to English Common Law–based dispute resolution
The distinction between registry and court jurisdiction is critical.
10: Outsourced expertise vs cost-driven shortcuts
Many small businesses delay professional support to save cost.
In reality, this often increases risk.
Value of outsourced accountants & CFOs
- Independent oversight
- Proper debt and cash tracking
- Regulatory alignment
- Audit-ready records
- Early risk detection
The benefit is risk prevention, not bookkeeping.
11: Compliance is protection, not paperwork
Effective compliance:
- Builds banking confidence
- Protects directors
- Reduces regulatory exposure
- Improves valuation
Poor compliance:
- Limits banking access
- Increases penalties
- Exposes founders personally
Ongoing advisory matters more than one-time setup.
12: How Inchub supports structured, resilient businesses
Inchub Corporate Services Providers LLC works with entrepreneurs to design businesses that are resilient under stress, not just compliant on paper.
The focus is on:
- Clear separation of operating, holding, and personal risk
- Governance-led structuring
- Foundations and holding entities designed for continuity
- Ongoing accounting, CFO, and compliance oversight
- Alignment with international best practices
The objective is risk mitigation before risk appears
13: Key takeaways for readers
✔ Growth must be matched with structure
✔ Debt must be transparent and manageable
✔ Personal and business risks must be separated
✔ Jurisdiction choice affects long-term safety
✔ Governance is a survival tool, not a formality
14: Closing perspective
Large corporate collapses are not warnings against ambition.
They are reminders that:
Success without structure is fragile.
Structure without expertise is incomplete.
Small businesses that invest early in governance, clarity, and independent oversight are far better positioned to survive market cycles and protect founder wealth.
Frequently Asked Questions (FAQs)
1: Was this case fraud?
This article does not make any such claim.
It discusses governance and disclosure failures as reported in public proceedings.
2: Can this happen to small businesses?
Yes — and often faster, due to fewer buffers and higher personal exposure.
3: Are foundations only for wealthy families?
No. Foundations are increasingly used by SMEs for asset protection and continuity, when structured correctly.
4: Is DIFC or ADGM mandatory?
No. Jurisdiction selection depends on:
- Business model
- Banking strategy
- Risk profile
5: What is the single biggest lesson?
Separate personal wealth from business risk before scaling.
6: Can good governance really prevent business failure?
Good governance does not eliminate risk, but it:
- Detects problems earlier
- Limits damage when issues arise
- Preserves options (restructuring, refinancing, sale)
Most failures occur after warning signs are ignored, not suddenly.
7: Is rapid growth itself a risk?
Growth is not the risk — uncontrolled growth is.
Risk increases when growth:
- Is funded primarily through short-term debt
- Outpaces internal controls
- Lacks cash-flow discipline
Well-governed growth is sustainable even at high speed.
8: Why do lenders care so much about structure?
Banks and investors assess:
- Where risk sits
- Who is legally responsible
- How easily liabilities can spread
Clear structures reduce uncertainty, which:
- Improves banking relationships
- Lowers compliance friction
- Increases long-term trust
9: Are personal guarantees always bad?
Not always, but they must be:
- Limited in scope
- Clearly documented
- Understood in worst-case scenarios
Uncapped or blanket guarantees are one of the largest personal wealth risks for founders.
10: How early should a small business think about structuring?
Earlier than most founders expect.
Structuring is easiest:
- Before external debt
- Before investors enter
- Before assets accumulate
Restructuring after problems arise is always more expensive and limited.
11: Do small businesses really need holding companies?
Not all — but many benefit from them.
Holding structures are particularly useful when:
- There are multiple business lines
- Assets need protection
- External investors or lenders are involved
- Succession planning is relevant
12: Are foundations about control or protection?
Foundations are primarily about:
- Protection
- Continuity
- Governance
They do not replace management and should not interfere with daily operations when designed correctly.
13: Is English Common Law always better?
No legal system is “best” for all cases.
English Common Law is often preferred because it offers:
- Predictable outcomes
- Strong contract interpretation
- International familiarity
The correct choice depends on business model, geography, and counterparties.
14: Can accounting issues really bring down a business?
Yes — and often silently.
Poor accounting leads to:
- Incorrect decisions
- Undetected cash stress
- Regulatory exposure
- Loss of banking confidence
Most collapses begin as accounting blind spots, not operational failures.
15: Why outsource accounting or CFO functions instead of hiring internally?
Outsourced experts provide:
- Independence
- Broader exposure across industries
- Early risk detection
- Cost efficiency without loss of control
The value lies in judgment and oversight, not data entry.
16: Is compliance only relevant when regulators inspect?
No.
Good compliance:
- Protects directors and shareholders
- Reduces future disputes
- Improves investor confidence
- Enables smoother exits or fundraising
Compliance is a preventive mechanism, not a reaction.
17: Can strong structures improve valuation?
Yes.
Buyers and investors value:
- Clean structures
- Clear ownership
- Transparent financials
- Minimal personal risk entanglement
Well-structured businesses are easier to:
- Sell
- Invest in
- Scale
18: What is the most common mistake founders make?
Delaying structure and governance until:
- The business is “bigger”
- A problem appears
- A bank demands it
By then, options are fewer and costs are higher.
19: Does this case mean entrepreneurship is unsafe?
No.
It highlights that:
- Entrepreneurship requires discipline as well as ambition
- Systems matter as much as vision
- Longevity depends on structure
Many successful businesses thrive precisely because they adopt these lessons early.
20: What should a founder do after reading this article?
Pause and assess:
- Where risk currently sits
- Whether personal and business exposure are mixed
- If financial oversight is independent
- Whether structures reflect current scale
Awareness is the first layer of protection.
Final takeaway for readers
Growth without structure is fragile.
Structure without governance is incomplete.
Businesses that invest early in:
- Clear structures
- Independent oversight
- Jurisdictional clarity
are far more resilient in uncertain environments.
About the Author
Inchub Corporate Services Providers LLC is a Dubai-based advisory firm specialising in business structuring, accounting, compliance, and governance-led growth for entrepreneurs, SMEs, and family-owned businesses.
Inchub focuses on helping businesses:
- Build sustainable structures
- Mitigate compliance and financial risk
- Align with international best practices
This article reflects Inchub’s commitment to education, transparency, and informed decision-making.