Commercial FAQs
What can we do for you?
Acquisition/sale of Commercial land and property
We will guide you through the process of a business sale or purchase, whether it is the sale and purchase of shares or trading assets and goodwill, from agreeing heads of terms to completion of the purchase or sale. We work closely with other professionals in the transaction such as bankers or accountants to ensure the whole process goes as smoothly as possible.
Our lawyers takes a proactive approach to transactions providing support to clients, balancing law with the other practical needs of the client drawing on our wealth of experience in dealing with transactions, liaising with agents, banks, accountants and other advisers as the need arises.
back to the topCommercial leases
We regularly advise Landlords and Managing Agents of commercial property on all issues arising out of business and residential Leases.
The law regarding business and residential Leases is constantly changing and can be complex. Therefore legal advice should be sought to avoid the many legal pitfalls.
We can provide expert advice and assistance with respect to the following:
- Landlord and Tenant 1954 Act Notices
- Business Lease renewals and terminations
- Self help (distress and forfeiture by peaceable re-entry)
- Forfeiture (Section 146 Notices and court proceedings)
- Lease disputes
- Disrepair disputes
- Commercial rent arrears and service charge arrears recovery
- Dilapidation claims
- Tenant Insolvency
- Rent review disputes
- Break notice disputes
- Unreasonable refusal by landlord to consent to the assignment of a lease
back to the topFormation and restructuring of companies
Companies are regulated by the Companies Act 2006 which may be unfamiliar to you and we can help you to ensure you comply with the Act. You may want to take advantage of some of the new powers (such as dispensing with your Company Secretary or the requirement to hold an annual general meeting) but have yet to amend your company's constitution to benefit from these powers. Shareholders as the owners of a company have a key role in the operation of the company so it is recommended that the relationship between shareholders should be governed by a shareholders' agreement. Grievances, and especially deadlock, between shareholders can impact on management time and resources and adversely affect the business.
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Partnership Agreements & LLPs
Partnerships are an alternative and less formal means by which a group of people may work together for commercial gain. Whilst a business may develop organically into a partnership without formal documentation the default provisions in the Partnership Act 1890 may not suit the business's needs. Formal agreements should be put in place to protect the relationship between the parties for the duration of the partnership and particularly when partners join or leave it.
Limited Liability Partnerships (LLP's) are an alternative way to benefit from limited liability status. Whilst an LLP is a corporate entity it is closer to a partnership than a company. The LLP Regulations will govern an LLP if there is no LLP agreement between the members but if there is an agreement it is not filed at Companies House so it is private. We can assist with the incorporation of an LLP and drafting an agreement between the members as well as advising on the Regulations if you do not have an agreement.
back to the topBusiness Sale Agreements
The purchase of a business may involve the purchase of the target company’s assets, or by the purchase of the target company itself. There are numerous considerations to take into account in deciding which is the best way to proceed. We and your accountants can advise you upon this, and should be consulted at as early a stage as possible, whether you are buying or selling. A seller should realise that it may be beneficial from a tax point of view to sell the company, rather than its assets. A buyer should be aware that buying the company also involves buying its liabilities, and the full extent of those liabilities may not be immediately apparent.
When a purchaser acquires a company by the purchase of its share capital, both the assets and liabilities of the company are acquired.
Therefore, in a purchase of the business it is essential to investigate the target company to ascertain exactly what the state of affairs of the company will be at the time of the purchase of the shares. This is done by conducting an investigation of the target, its assets and its liabilities. This will usually be in conjunction with any due diligence enquiries undertaken by the investigating accountants. The information gathered culminates in warranties given by the directors or owners of the target company as to the state of the company at the time of purchase. A purchase of shares in this way indirectly takes over the company’s assets at their historic cost; they may inherit a potential deferred tax liability. This usually affects the cost that the purchaser is willing to agree to pay for the shares.
After an inspection of a company’s properties and its assets, an investigation of the company itself should follow. Such enquiries include:
- appropriate company searches
- inspection of statutory books
- Investigation of the title to property and premises verifying the ownership of the target’s own intellectual property rights and if necessary, the nature and terms and conditions of licences to use intellectual property owned by others.
- verifying the target’s financial position, with reference to overdrafts, charges and provision of guarantees
- enquiring into any material litigation or product liability exposure
- if necessary, engaging environmental consultants, surveyors, pension advisors and insurance brokers
- obtaining appropriate warranties and indemnities to ensure the opportunity for recourse by the purchaser against the directors of the target should the information provided by or on behalf of the target prove to beinaccurate.
A share sale is technically a straightforward transaction, accomplished by the execution of standard share transfers. However, the sale is likely to be effected by a detailed share sale agreement, incorporating many warranties and, sometimes, a tax indemnity (or deed of covenant), allowing potential claims to be made by the purchaser against the vendor.
From a Seller’s perspective, the sale of shares will be a disposal for capital gains tax purposes. Outgoing shareholders usually aim to maximise their ‘net of tax’ position and avoid pitfalls arising from anti-avoidance legislation. Various ways to do this include:
- Leaving the UK and attaining non-residence status
- Deferring the charge by taking loan stock or other securities issued by the acquiring company
- Having the target company declare a substantial dividend or buying some of the seller’s shares prior to the sale.
A share sale is favourable if the seller plans to discontinue its business as liabilities of the target company will inevitably pass to the buyer and the risk of a double tax charge is avoided.
If the seller plans to stay in business, a share sale is normally not recommended since gains realised on the sale of the shares cannot be rolled-over into the purchase of new business assets.
back to the topFranchising, Agency and Distribution Agreements
These areas are real potential legal minefields. Practical and sensible advice is needed before buying any franchising agreement, to ensure that the deal is fair to you and that you will receive value for money. We are experts upon the commercial agency regulations. It is imperative that you don’t appoint a commercial agent without taking legal advice first because it is most important that you understand the potential consequences and the potential extent of the compensation you may need to pay your agent if you ever wish to terminate that agency agreement, regardless of whether it is expressed to be a short term or trial arrangement or not. Distribution agreements at first sight may appear more straightforward, but can easily fall within the scope of the commercial agency regulations. We strongly recommend that before you enter into any commercial agreements of these types, you consult us.
back to the topSupply agreements
We can advise on commercial contracts and agreements: including supply chain and outsourcing agreements, licensing agreements, consultancy agreements with self-employed contractors and resale agreements.
back to the topBusiness start-ups
The decisions you make when setting up in business can have a significant influence on the success or failure of your venture for years to come. If you are about to launch a new business or restructure an existing one, the advice of an experienced solicitor can help position you for success from the outset. Whether you are starting a new business or need small business legal advice, we can help.
Will you do business as a sole trader, a partnership, a company or a limited liability partnership? The choice has important implications from both a tax and liability standpoint. We will discuss your business plans and present your options, describing the potential advantages and disadvantages of each. Once you decide the type of business that is right for you, we will prepare the documentation necessary to file your business with the Companies House registry. From business incorporation to business name registration, our business solicitors can advise you from start to finish on the business start-up process.
We will make certain that all the individuals within the business hierarchy— such as partners, directors and officers — understand their roles and responsibilities. We will prepare partnership agreements or shareholder agreements, and help you plan for complying with all obligations relating to meetings, reviews and reporting. In addition, we will help you develop policies and procedures related to the hiring, management and dismissal of employees.
Our solicitors can negotiate, draft and review contracts with customers, suppliers, landlords and others. We work to ensure that your business is compliant with all applicable laws and regulations.
back to the topTerms & Conditions of Sale
It is no exaggeration to say that these can be crucial to the success of any business. Do you realise that standard terms and conditions may not be binding on your customer? And are you sure that all reasonable eventualities are covered in clear and unambiguous language? We can advise how best to ensure that your terms and conditions are part of the contract, and we can draft conditions or review existing conditions to ensure that all reasonable eventualities are covered.
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