Pinney Talfourd Solicitors
UPMINSTER 01708 229 444
BRENTWOOD 01277 211 755
HORNCHURCH 01708 511 000
LEIGH-ON-SEA 01702 418 433
CANARY WHARF 0203 105 0305

Company and Commercial Law

Our Company and Commercial Department is recognised as one of the leading commercial law firms in Essex by The Legal 500, an independent and definitive guide to the best law firms in the UK. They comment that we are ‘a reliable and proactive outfit’ that acts for ‘small private owner-managed businesses through to large plc companies’.

We offer a highly skilled team of company law experts, many of whom have direct commercial experience outside of legal practice.  This allows us to deliver a unique service which seamlessly blends relevant insight with a thorough understanding of the law, leaving us well placed to provide you with innovative and thoughtful solutions in unique or unusual situations.

Getting your business on the right footing has never been more important. We provide a bespoke and practical service which is delivered to you in a practical and cost-effective manner.

FREE Initial Consultation

Contact our company and commercial law team in Essex for a free, no obligation initial consultation if you have a particular matter you would like to discuss. We can offer telephone consultations or face-to-face meetings in any of our five offices in Brentwood, Hornchurch, UpminsterLeigh-On-Sea or Canary Wharf. We are also happy to meet with yourselves at your own business premises in Essex, London or further afield.

FREE Business Legal Review Service

If you do not have a particular matter in mind but would like us to provide a free no-strings review of your business, contact our company and commercial legal team and ask about our Free Business Legal Review Service.



▼ Recent deals include

  • Advising on the corporate aspects of a major land development project in East London
  • Sale of two Toyota car dealerships by the Hills Group
  • Acquisition of a specialist motorcycle insurance company and the acquisition of a specialist insurance broker by a large insurance provider
  • Purchase of a large franchise catering business
  • Corporate restructure for a commercial landlord on an 800K secured refinancing
  • Sale of a long-established local export concern for a purchase of over £2.5m
  • Acting on behalf of a majority shareholder on a £3.5 million share buy-back
  • Acquisition of a pre-packed food company by a frozen, chilled and dry-foods supplier

Your key contact:
Edward Garston

▼ Company and Commercial Law - FAQs

Q What is a Shareholders Agreement?

A It is an agreement made between the shareholders which governs the relationship between them.

In a private limited company it is advisable to have a shareholders agreement in place to set out terms governing issue and transfer of shares, directorships, dividend policies etc.

In a joint venture it is advisable to have in place a shareholders agreement, commonly known as a joint venture agreement to deal with the ongoing relationship of the joint venturers as shareholders in the joint venture company and to cover issues such as what roles each of the joint venturers will have within the company, what remuneration they will receive etc.

Q What is a Joint Venture?

A The term joint venture describes a commercial arrangement between two independent entities. In practice, the legal form of a joint venture is likely to be determined by:
  • The nature and size of the enterprise
  • The identity and location of the participants
  • The commercial and financial objectives of the participants
Joint ventures have become increasingly important as a medium through which companies undertake significant business activities and projects. The four basic legal forms are:
  • A limited liability company
  • A limited liability partnership (LLP)
  • A partnership (or limited partnership)
  • A purely contractual co-operation agreement
Q What are the key things to consider from a legal perspective in relation to a share purchase/asset purchase?

A Due Diligence, Warranties, Indemnities and Disclosure

Due Diligence

Due diligence is the process by which a buyer who wishes to acquire shares in a company or wishes to purchase the assets of a business investigates the records of that company/business to support its value, whether there are matters on which further information is required or whether any new information disclosed through this process require a price negotiation.

Reports from accountants and legal advisers are usually prepared to record the findings of the legal and financial due diligence process. The due diligence process is supported by warranties and indemnities in the share or asset sale and purchase agreement.

Warranties

Warranties are contractual statements contained in the share/asset purchase agreement which take the form of assurances from the seller as to the condition of the company or business and, in particular, any existing liabilities. They are usually contained in a separate schedule to the agreement.

A thorough due diligence exercise should provide the buyer with a good picture of the value of the company or business and allow it to agree a price based on its knowledge and expectations gleaned from the exercise. Warranties should not be seen as a substitute for due diligence - the two are complementary.

It is always preferable for a buyer to know of a problem in advance, as it then has the opportunity to walk away, argue for a price adjustment or seek specific contractual protection, rather than to have to sue for breach of warranty at a later stage.

Warranties serve two main purposes:
  • To provide the buyer with a remedy (a claim for breach of warranty) if the statements made about the company later prove to be incorrect and the value of the company is thereby reduced. Warranties therefore provide a form of retrospective price adjustment.
  • To encourage the seller to disclose known problems to the buyer. Because the seller's liability under the warranties is invariably limited to the extent that proper disclosure is made against them, the effect of the warranties should be to flush out potential problems.
Indemnities

An indemnity is a promise to reimburse the buyer in respect of a particular type of liability, should it arise. The purpose of an indemnity is to provide a guaranteed remedy (on a pound-for-pound basis) for the buyer where a breach of warranty may not give rise to a claim in damages, or to provide a specific remedy which might not otherwise be available at law.

Disclosure

Disclosure is the process of the seller making general and specific disclosures against the warranties contained in an share/asset purchase agreement. If the seller fails to disclose a relevant matter, in respect of the warranties, he may be sued by the buyer for breach of warranty. The seller usually makes his disclosures in a disclosure letter and attaches relevant documents to that letter to support its disclosures.

Q Why would a company wish to buy-back its shares?

A The key reasons for a company undertaking a share buyback are to:
  • Return surplus cash to shareholders
  • Increase earnings per share
  • Increase net assets per share
  • Enhance share liquidity
  • Increase gearing
  • Provide an exit route for shareholders
It is worth noting that a limited company undertaking a share buyback must comply with Part 18 of the Companies Act (CA 2006). A buyback that is not carried out in accordance with Part 18 is unlawful and the transaction is void.

In extreme cases the buyback may be unwound in which case the repurchased shares would be treated as still being in issue and held by the original shareholder(s).

Q What is a Partnership at will?

A A partnership at will is a form of partnership that arises where no fixed term has been agreed for the duration of the partnership or the partnership has been entered into for an undefined term.

Q Can a partner of a partnership at will retire from the partnership or must it be dissolved? What if there is a partnership agreement in place?

A A partner has no right to retire from the partnership (that is, leave the partnership) other than:
  • Where the agreement allows for retirement; or
  • With the consent of all the other partners; or
  • In the case of a partnership at will, a partner must give notice in accordance with the provisions of the Partnership Act 1890, which will have the effect of dissolving the partnership

If there is a partnership agreement in place which deals with retirement, then retirement and dissolution should occur in accordance with its terms (unless both parties agree otherwise). This agreement will probably continue to govern the relationship between the two partners until the outgoing partner has retired and the partnership is dissolved.

After that it will (probably) have no effect in relation to the day-to-day business as continued by one person (as there will no longer be a partnership to govern) but there may be some provisions that will survive dissolution, for example, restrictive covenants and provisions relating to the use of the business name.

If there is no partnership agreement or if the existing agreement does not deal with retirement and dissolution adequately or at all, then it is preferable that a deed of dissolution is entered into to deal with all outstanding issues.

Q What are the ways in which you can dissolve a partnership?

A A partnership at will may be dissolved at any time by a partner serving notice on the other partner(s). A partnership will be a partnership at will unless contrary intention can be proved, for this, there must be an express or implied agreement that is inconsistent with the right which a partner would otherwise have to determine the partnership by notice.



Expertise

Our specialist solicitors will make it their business to get to know you and your enterprise in order to provide the very best and relevant advice to you.