Selling your business? Essential do’s & don’ts for the early stages

Selling your business?  Essential do’s & don’ts for the early stages
Whether you have received an unsolicited invitation to sell your business, or if a sale is part of your own carefully thought out plan, a successful sale will be heavily defined by events in the early stages. Our advice to business owners is always to hold your nerve, follow these important do's and don'ts, and seek specialist advice. Do take advic...
Continue reading
  125 Hits
125 Hits

Employee Shares – Avoiding the Traps

Employee Shares – Avoiding the Traps
With politicians once again promoting the wider benefits of extending share ownership to the workforce, few are aware of the many ways which already exist to bring this about. Benefits of a share-owning workforce are clear to see. Knowing that the employer's success will filter through to personal reward is likely to keep staff more engaged and mot...
Continue reading
  498 Hits
498 Hits

Royal Mail hit with £50m fine for breaching competition law

Royal Mail Hit with £50m Fine for Breaching Competition Law
Royal Mail has found itself in the headlines this week as it has been fined a record breaking £50 million for a breach of competition law. Ofcom, the UK communications regulator, investigated Royal Mail and decided that it had abused its dominant position in the market place. The investigation was brought to Ofcom's attention after Whistl, the main...
Continue reading
  758 Hits
758 Hits

Avoid the Traps when Naming your Business!

Avoid the Traps when Naming your Business!
​ The name of your trading business can be one of the most valuable assets you have. It allows customers to find you in an often crowded marketplace, distinguishing you from the rest, allowing you to build and develop your brand and trading identity. But rather than have a completely free choice of name, there are strict rules and guidelines about ...
Continue reading
  545 Hits
545 Hits

Deliveries – Know Your Rights!

Deliveries – Know Your Rights!
​ The volume of goods being delivered to both consumers and businesses is such that the Chartered Trading Standards Institute (CTSI) has launched a new website to advise on and clarify the law concerning the delivery process. The advice is aimed at consumers, businesses and as well as practitioners. According to the CTSI, the driving force for maki...
Continue reading
  461 Hits
461 Hits

EU Underlines Intellectual Property Infringement Costs

EU Underlines Intellectual Property Infringement Costs
The Intellectual Property arm of the European Union has just issued its most comprehensive report yet on the scale, costs, and risks of IPR infringement throughout the EU. Looking back on developments since 2013, the EUIPO has not only reported on infringement but has estimated that the total contribution of IPR intensive industries to the EU econo...
Continue reading
  536 Hits
536 Hits

Restrictive Covenants in Spotlight After CEO's Move

Restrictive Covenants in Spotlight After CEO's Move
News that Sir Martin Sorrell, the former chief executive of global agency WPP, plans a high profile return to the world of advertising has brought workplace restrictive covenants firmly back into focus. Just six weeks after his departure from WPP, his new agency, S4 capital, sounds a lot like the company he helmed for 33 years. The initial commenta...
Continue reading
  402 Hits
402 Hits

When did you last check your Company's T&Cs?

When Did You Last Check Your Company's T&Cs?
By now, many of you will have received numerous emails regarding GDPR. But do you have your own set of terms and conditions in place? We have all been recently bombarded with emails from companies confirming that they currently have your details on their mailing list, and are updating their terms and conditions to comply with the General Data Prote...
Continue reading
  403 Hits
403 Hits

Shareholder Rights - Standing Up For Minorities

Shareholder-1
With shareholder power almost always linked to the number of shares held, we explain the importance of not discounting your minority shareholders.

It’s all too easy to assume that small, or minority, shareholders are unable to exercise any significant influence within a company at all.  In fact, given the limited statutory rights granted to minorities, and the practice of discounting the value of a minority interest, it is easy to see why such a perception exists.

But whether this is the case or not, it would be foolish for directors or majority shareholders to disregard the interests of minorities out of hand.  Parts of the Companies Act 2006 grant specific and valuable rights to all shareholders, irrespective of the size of their shareholdings.

A good starting point is to consider exactly how minor the minority shareholder is.  Arguably, a minority shareholder is one that is unable to pass an ordinary resolution without the assistance of any other person, and on this basis, a holding as large as 50% could be deemed to be a minority interest. 

That said, if shareholder power is viewed from the perspective of what it permits a shareholder to prevent happening rather than from what it permits the shareholder to do, then minority interests do matter.  The same 50% shareholding that could not single-handedly pass an ordinary resolution is certainly sufficient to block an ordinary resolution taking effect.  If your stake amounts to more than 25% then this is enough to block a special resolution.

A holding of more than 10% will block a general meeting taking place at short notice, and with more than 5% then your rights extend to requiring the company to hold a general meeting and circulating a written resolution.

Continue reading
  779 Hits
779 Hits

Corporate PSC Filings Now in Force

Person-of-Significant-Control-1
In what must rank as one of the fastest law enactments since the general election, the Information about People with Significant Control Regulations 2017 came into force on June 26.

Having only been published on 22 June and laid before Parliament on 23 June, the regulations largely reflect the government’s previous proposals and effectively require a company to update its own register of Persons of Significant Control (PSC) within 14 days of the change taking place, and inform Companies House of the change 14 days thereafter.

So any changes in PSCs will now show on the register far sooner than those which were previously contained in the annually filed confirmation statement.  Note that the new requirements only apply to changes in PSCs; changes in minority shareholdings, which are not in themselves PSC’s and do not require registration for other purposes, will not trigger a filing requirement.

Compliance with the rules should not be overlooked since failure to provide accurate PSC information and to respond to notices requiring information are criminal offences carrying the possibility of fines and or a prison sentence of up to two years.  

 

MORE INFORMATION 

If you are in any doubt as to your obligations or need assistance with compliance relating to this latest legislation, do not hesitate to seek specialist advice from Pinney Talfourd’s commercial department.

 
This article was written by Edward Garston, a company commercial solicitor at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of June 2017.
  385 Hits
385 Hits

Keynote address to Institute of Financial Accountants

Pinney-Talfourd-IFA-Seminar
Senior Associate Edward Garston took to the lectern this week to deliver the keynote address at the quarterly meeting of the Essex Branch of the Institute of Financial Accountants.

Delivering insights into legal issues affecting the proper functioning of companies, the corporate specialist explained the types of problems that can occur and how an investor agreement could tackle them.

Using easy to understand scenarios, Edward Garston explained the types of issues which can occur if shareholders want to transfer shares, control commercial operations and if there is no overall board or shareholder control. 

Following a lively question and answer session, he then turned his attention to common issues which can occur during company acquisitions and sales, and specifically with a share purchase agreement and other key documentation. 

Commenting on the subject he observed “Accountants play a critical role during a company acquisition, and very often their input will determine how a transaction proceeds.  It is essential, therefore, to focus on those areas most likely to require their specific consideration”.

The event was attended by IFA members drawn from across East London and Essex, as well as representatives from the IFA itself, banks, and alternative lenders.

Continue reading
  405 Hits
405 Hits

Be aware - UK companies vulnerable to fraudsters

Fraud-1
Recent high-profile hacking of worldwide computer systems, most noticeably those of the NHS, serve as a chilling reminder to businesses that threats are always evident.
 
Hardly a day seems to pass without a new online scam or fraud making the headlines, each one slightly different, more costly, and more disruptive than the last.  Terms such as ransomware, cybercrime and ID theft, unheard of just a few years ago, are now in everyday use.

Reports suggest that UK limited companies themselves are increasingly subject to ID theft with fraudsters known to change details of the appointed directors and registered office as a precursor to an elaborate scam.  Once under their control, criminals are able to use the company to take out loans, make expensive purchases, or even hijack the Company for something more sinister.

Such is the risk that Companies House has just restated its advice for companies looking to protect themselves.  Top of the list is the protected online filing scheme known as PROOF.  This is now a well-established way to protect a company from unauthorised record changes by preventing the filing of certain paper forms which, if accepted for filing, would assist the criminal.  Crucially, once a company becomes registered for PROOF it can no longer lodge notification of a new registered office or changes to directors on paper.  Instead, all such changes must be made online using secure login details.

Part of the problem is the time taken for a legitimate director to discover that fraudulent filings have been made.  After all, directors are not generally in the habit of checking their filing history on a regular basis and this delay creates a perfect window of opportunity.  But a newly launched free Companies House service aims to address this by automatically sending an email notification every time a new document is filed for this, or any other, registered company.  Learning of such changes early on is critical to help damage limitation.

Surprising to most is the limited extent of the registrar to investigate potential fraud.  Although the official advice is to contact it early on, the registrar has no investigatory powers or powers of prosecution.  In such circumstances, the Police and Action Fraud are better placed to assist. 

In fact, it is only through the recent introduction of specific legislation that a mechanism exists to resolve disputes concerning registered office addresses.  If a complaint is received that an address being used is not authorised, Companies House has the power to change the record following compliance with a dispute process.  Although a step in the right direction, unfortunately, the timescales involved are such that this is unlikely to either deter or prevent fraudulent activity.

Continue reading
  554 Hits
554 Hits

RIP To Corporate Secrecy In The UK

Corporate-Secrecy-1
Companies will now be required to announce changes to their key stakeholder team within 14 days as a result of the Fourth Money Laundering Directive.

It has always been something of an anomaly that publicly available details of shareholders and other PSCs (Persons of Significant Control) are updated annually, whereas almost every other change triggers the need for a prompt announcement.  Often boardroom changes are the only external indication that ownership of a private limited company has changed hands, with full details of the new owners only revealed once the next confirmation statement is filed. Details of a well-timed deal could be kept in the dark for as long as twelve months, and a quick succession of transfers may never see the light of day at all.

All of this is due to change on June 26 as a result of the implementation of the Fourth Money Laundering Directive. Current proposals are for PSC reporting to be removed from the confirmation statement in favour of prompt filing of any changes. Companies will have 14 days to update their internal PSC register, and then a further 14 days to file at Companies House.

Further changes will see rules on PSC exemptions tightened.

Interestingly, Companies House has made it clear that it plans to improve the accuracy and completeness of PSC data by introducing new compliance activities marking a distinct departure from taking information provided on trust. The new plans include contacting those with clearly incorrect data as well as the introduction of a “report it now” feature to simplify third party enquiries.

Whether or not this will see the UK becoming the most transparent place in the world to do business remains to be seen. It is consistent with recently announced requirements for overseas corporates to provide PSC information if they tender for government contracts or acquire UK property, a pioneering move compared to other developed economies. However, there are concerns that in the absence of similar requirements in other jurisdictions, the move could dampen overseas investment from legitimate sources preferring to keep activities private. Exact details of these plans are still being worked on pending the conclusion of a public consultation.

Continue reading
  452 Hits
452 Hits

© Pinney Talfourd Solicitors | Disclaimer | Offices: Upminster | Brentwood | Hornchurch | Leigh-on-Sea | Canary Wharf