Running your business
Running your business
When you are running your business, you want to be focused on the things that make you money, and not worrying about non-core functions such as legal. That being said having an understanding is key.
This section covers a number of different legal matters that might come up while you are running your business.
Hiring & Managing Employees
Invitation letter to a disciplinary appeal hearing for misconduct
What is it?
Make sure you do things right when you discipline an employee. Our employment solicitors can provide you with a disciplinary hearing letter/notice to be sent to the employee which sets out in clear and simple terms the disciplinary allegations, process to be followed, the employee's rights and potential sanctions.
Why is it important?
If you are formally disciplining an employee for misconduct, this letter ensures that you are complying with the unfair dismissal laws. It also meets the requirements of the statutory ACAS Code of Practice on Disciplinary and Grievance Procedures. It is always best practice to give the employee a right to appeal any misconduct decision. The letter should tell the employee they must appeal in writing with their grounds of appeal. If you accept an appeal by the employee, you should respond with a letter inviting the employee to an appeal hearing for misconduct.
Risks
Non-compliance with the ACAS Code of Practice on Disciplinary and Grievance Procedures will be taken into account by an employment tribunal when deciding whether an employee has been treated fairly and can also result in the tribunal increasing the amount of compensation awarded your employee if the case went to court.
Invitation letter to an appeal hearing for misconduct
What is it?
The right to appeal against the outcome of disciplinary action is an important element of a fair disciplinary process. Where an employee appeals against a disciplinary sanction, the employer should invite them to a disciplinary appeal hearing.
Why is it important?
The ACAS Code of Practice on Disciplinary and Grievance Procedures states that the employee should be given the right to appeal against any disciplinary sanction or decision.Our employment solicitors can provide you with an invitation letter to an appeal hearing that helps ensure that your processes are watertight. The invitation should include information about the employee's right to be accompanied at the appeal hearing.
Risks
Non-compliance with the ACAS Code of Practice on Disciplinary and Grievance Procedures will be taken into account by an employment tribunal when deciding whether an employee has been treated fairly and can also result in the tribunal increasing the amount of compensation awarded if the case went to court.
Disciplinary outcome letter for misconduct - warning or no action
What is it?
This is a letter that can be used to inform the employee of the outcome of the disciplinary meeting when the outcome is a warning or that no further action is to be taken by the employer.
Invitation letter to a performance appeal hearing
What is it?
This is a letter that should be used to invite an employee to a performance appeal hearing.
Invitation letter to a performance appraisal
What is it?
An appraisal is a formal process that allows you and a member of staff to assess the staff member’s performance over a period of time eg on a 6 month or 12 month basis. A detailed appraisal has a number of benefits for you and your employees.
Why is it important?
For example, it gives you the opportunity to:
1. review and provide feedback on their performance and set objectives to maximise performance.
2. It also gives the employee the opportunity to comment on their performance, suggest improvements and bring any problems to your attention.
3. It can therefore assist in motivating employees, resolution of problems and the prevention of legal disputes.
Our employment solicitors can provide you with an invitation to attend an appraisal meeting letter tailored to your specific requirements. This letter sets the date for the meeting, who will conduct the meeting and whether the member of staff needs to bring any particular documents or information to the meeting.
Contact our employment law solicitors on 01234 938089.
Poor performance outcome letter - warning or no action
What is it?
This is a letter that can be used to inform the employee of the outcome of the poor performance meeting when the outcome is a warning or no further action is to be taken.
Disciplinary procedure
What is it?
A disciplinary procedure is a formal way for an employer to deal with an employee’s unacceptable or improper behaviour (‘misconduct’) or performance (‘capability’).
Why is it important?
You should put your disciplinary procedure in writing and make it easily available to all staff. IIt should say what performance and behaviour might lead to disciplinary action and what action your employer might take.
It should also include the name of someone you can speak to if you do not agree with your employer’s disciplinary decision.
Disciplinary steps : Your disciplinary procedure should include the following steps:
-
A letter setting out the issue.
-
A meeting to discuss the issue.
-
A disciplinary decision.
-
A chance to appeal this decision.
Risks
Before starting a disciplinary procedure against a member of staff , you should first see whether the problem can be resolved in an informal way. This can often be the quickest and easiest solution.
If you need help in resolving an employment matter or dispute, please contact our employment solicitors on 01234 938089. We can provide you with advice on a fixed fee basis.
Suspension Letter
What is it?
Dismissal letter for misconduct
What is it?
Dismissal letter for poor performance
What is it?
Gross misconduct dismissal letter
What is it?
Dismissal letter for employees without unfair dismissal rights
What is it?
Appeal letter
What is it?
This is a letter from an employee against whom a disciplinary sanction has been imposed appealing against the dismissal.
If you need help in resolving an employment matter or dispute, please contact our employment solicitors on 01234 938089. We can provide you with advice on a fixed fee basis.
HR Policies
Letter ending a contract
- The letter contains a clear description of the reasons for the termination of the contract.
- The date of termination is mentioned.
- The letter thanks the other party for their services.
Our contract solicitors can provide you with a bespoke letter for a reasonable fixed fee that you can use to cancel a contract or agreement.
Letter assigning a contract
What is it?
Transferring a contract from one party to another is known as ‘assigning’ a contract or ‘an assignment’ of the contract. An assignment ends one party’s involvement in the contract and transfers their contractual rights, benefits and interests to a new party.
Risks
Some contracts may contain a clause prohibiting assignment; other contracts may require the other party to consent to the assignment. Unless assignment is prohibited in a contract, a party may assign their rights to third party without the consent of the other party to the agreement. A letter of assignment is used to effect the assignment and will be signed by the outgoing party and the incoming party.
Protecting your IP
Trademark (UK, EU, US, China)
-
words (eg the trademark “Nandos”) -
pictures and words (eg the Pure Business Law trademark). -
slogans (eg the Lidl strap line “Big on quality, Lidl on price”) -
colours (eg the Cadbury Dairy Milk purple as owned by Kraft ). -
sounds (eg the Match of the Day theme song played when their logo appears at the beginning of football matches) and -
Logos (eg the Mac OS logo); -
3D shapes (eg the Pepsi cola bottle shape)
Patent (Worldwide)
Should I register my invention as a patent?
-
You can prevent others using your product or process if they intend to use it for commercial purposes. -
You can profit from your patent by only permitting certain people to use it for commercial purposes and only on condition that they pay you or give you a percentage of the profits they make from using your patent.
-
The PATLIB (patent library) centre -
A Patent attorney through the Chartered Institute of Patent Attorneys at www.cipa.org.uk
IP Assignment Agreement
Registering Designs
Non-Disclosure Agreement (NDA)/Letter of confidentiality
one-way confidentiality agreement
Assignment of intellectual property
Copyright
Business Relationships
Share Purchase Agreement
What is it?
A Share purchase agreement (SPA) is an agreement setting out the terms and conditions relating to the sale and purchase of shares in a company. Share purchase agreements are often complex documents which can become lengthy and create significant delay, friction and cost if not dealt with by experienced, business minded lawyers.
Why is it important?
There is often a choice and negotiation over whether it’s best for either or both parties to buy/sell assets rather than shares. This would depend on whether the current owner (seller) is a limited company. If not, there can be no share sale! Further, where a buyer wants to preserve as many customer relations as possible, they may elect to buy the shares as opposed to assets.
The seller’s solicitor usually draws up the draft share purchase agreement.
Risks
While the buyer’s solicitor will try to protect the buyer the interest of the seller’s solicitor is to minimise this protection, in particular by limiting the seller’s liability for misrepresentation. However, in practice, where there is fraudulent misrepresentation the seller will still be liable so the buyer may accept such clauses since they are not valid if the seller can prove fraudulent misrepresentation.
Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.
Asset Purchase Agreement
What is it?
An asset purchase agreement is an agreement setting out the terms and conditions relating to the sale and purchase of assets of a business. In an asset purchase, the company itself will be selling the assets, whilst in a share sale, the individual shareholders will be the sellers.
Occasionally a buyer will prefer to acquire certain assets of a business rather than acquire all of the shares in a company and therefore, both its assets and liabilities.
A buyer will normally prefer to buy the assets of a business, while the seller will prefer to sell the shares. The main benefit of an asset purchase is that a buyer may selectively pick the assets and liabilities they want to acquire and there is generally less risk of hidden liabilities than with a share purchase.
Risks
The main disadvantage of an asset sale, as opposed to a share purchase agreement is that each item must be transferred in accordance with its proper rules and made enforceable against third parties (eg through consents and approvals). This is especially the case for customer contracts, as a third party may view the transaction as an opportunity to renegotiate their contract thereby adding delay and additional costs to the transaction.
In addition, there may be other important contracts that are non-transferrable, or licences and consents unique to the seller which may not be transferrable.
In an asset sale it is vital to identify what exactly is being purchased. Assets transferred as part of an Asset purchase agreement may include:
- Plant and machinery.
- Premises;
- Stock;
- Contracts;
- Know-how; and
- Goodwill.
Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.
Disclosure Letter
What is it?
A Non-Disclosure letter or Non-Disclosure Agreement, also called a Confidentiality Agreement, is a legal contract between two or more parties by which the parties agree not to disclose information (which is intended to be kept secret) that they have shared with each other during a business relationship to third parties.
Why is it important?
This Agreement may either be one-way (unilateral) or two-way (mutual), depending on whether both parties will be providing the secret information. If one party will be providing the secret information to the other, it is called a Unilateral Non-Disclosure Agreement.
For example, where an inventor of an idea is sharing the idea with another person, the inventor is the disclosing party and the other party is the receiving party. If the two parties will share the secret information between themselves, it is called a Mutual Non-Disclosure Agreement.
Running an online business
Invitation letter to a disciplinary appeal hearing for misconduct
What is it?
Make sure you do things right when you discipline an employee. Our employment solicitors can provide you with a disciplinary hearing letter/notice to be sent to the employee which sets out in clear and simple terms the disciplinary allegations, process to be followed, the employee's rights and potential sanctions.
Why is it important?
If you are formally disciplining an employee for misconduct, this letter ensures that you are complying with the unfair dismissal laws. It also meets the requirements of the statutory ACAS Code of Practice on Disciplinary and Grievance Procedures. It is always best practice to give the employee a right to appeal any misconduct decision. The letter should tell the employee they must appeal in writing with their grounds of appeal. If you accept an appeal by the employee, you should respond with a letter inviting the employee to an appeal hearing for misconduct.
Risks
Non-compliance with the ACAS Code of Practice on Disciplinary and Grievance Procedures will be taken into account by an employment tribunal when deciding whether an employee has been treated fairly and can also result in the tribunal increasing the amount of compensation awarded your employee if the case went to court.
Invitation letter to an appeal hearing for misconduct
What is it?
The right to appeal against the outcome of disciplinary action is an important element of a fair disciplinary process. Where an employee appeals against a disciplinary sanction, the employer should invite them to a disciplinary appeal hearing.
Why is it important?
The ACAS Code of Practice on Disciplinary and Grievance Procedures states that the employee should be given the right to appeal against any disciplinary sanction or decision.Our employment solicitors can provide you with an invitation letter to an appeal hearing that helps ensure that your processes are watertight. The invitation should include information about the employee's right to be accompanied at the appeal hearing.
Risks
Non-compliance with the ACAS Code of Practice on Disciplinary and Grievance Procedures will be taken into account by an employment tribunal when deciding whether an employee has been treated fairly and can also result in the tribunal increasing the amount of compensation awarded if the case went to court.
Disciplinary outcome letter for misconduct - warning or no action
What is it?
This is a letter that can be used to inform the employee of the outcome of the disciplinary meeting when the outcome is a warning or that no further action is to be taken by the employer.
Invitation letter to a performance appeal hearing
What is it?
This is a letter that should be used to invite an employee to a performance appeal hearing.
Invitation letter to a performance appraisal
What is it?
An appraisal is a formal process that allows you and a member of staff to assess the staff member’s performance over a period of time eg on a 6 month or 12 month basis. A detailed appraisal has a number of benefits for you and your employees.
Why is it important?
For example, it gives you the opportunity to:
1. review and provide feedback on their performance and set objectives to maximise performance.
2. It also gives the employee the opportunity to comment on their performance, suggest improvements and bring any problems to your attention.
3. It can therefore assist in motivating employees, resolution of problems and the prevention of legal disputes.
Our employment solicitors can provide you with an invitation to attend an appraisal meeting letter tailored to your specific requirements. This letter sets the date for the meeting, who will conduct the meeting and whether the member of staff needs to bring any particular documents or information to the meeting.
Contact our employment law solicitors on 01234 938089.
Poor performance outcome letter - warning or no action
What is it?
This is a letter that can be used to inform the employee of the outcome of the poor performance meeting when the outcome is a warning or no further action is to be taken.
Disciplinary procedure
What is it?
A disciplinary procedure is a formal way for an employer to deal with an employee’s unacceptable or improper behaviour (‘misconduct’) or performance (‘capability’).
Why is it important?
You should put your disciplinary procedure in writing and make it easily available to all staff. IIt should say what performance and behaviour might lead to disciplinary action and what action your employer might take.
It should also include the name of someone you can speak to if you do not agree with your employer’s disciplinary decision.
Disciplinary steps : Your disciplinary procedure should include the following steps:
-
A letter setting out the issue.
-
A meeting to discuss the issue.
-
A disciplinary decision.
-
A chance to appeal this decision.
Risks
Before starting a disciplinary procedure against a member of staff , you should first see whether the problem can be resolved in an informal way. This can often be the quickest and easiest solution.
If you need help in resolving an employment matter or dispute, please contact our employment solicitors on 01234 938089. We can provide you with advice on a fixed fee basis.
Suspension Letter
What is it?
Dismissal letter for misconduct
What is it?
Dismissal letter for poor performance
What is it?
Gross misconduct dismissal letter
What is it?
Dismissal letter for employees without unfair dismissal rights
What is it?
Appeal letter
What is it?
This is a letter from an employee against whom a disciplinary sanction has been imposed appealing against the dismissal.
If you need help in resolving an employment matter or dispute, please contact our employment solicitors on 01234 938089. We can provide you with advice on a fixed fee basis.
Buying & Selling Goods & Services
Company formation
What is it?
Companies House is the UK’s ‘registrar of companies. A UK company can’t be formed without approval from Companies House therefore all company formation requests need to go through Companies House. You can apply directly or via company formation agents – who may charge slightly more than Companies House and are able to offer everything that Companies House offer, plus extra associated services.
Why is it important?
Company formation documents are the key pieces of documentation (i.e. the certificate of incorporation, memorandum of association and articles of association) that you will need to keep and refer to following your registration of your company with Companies
House. If you have access to a computer, you can form your company online in a matter of hours The prices vary but Companies House charge £12 if the formation is done online. Using the paper method via the actual IN01 form sent via post costs £40 for the standard 5-10 da service or £100 for the same-day service.
To form a company, you need the following information:
- Proposed company name
- The proposed Registered office address
- Shareholder(s) details
- Company director(s) details
- The share capital information and the particulars relating to each class of shares
- Details of the people with significant control details
You also need Articles of association – These set out the rules for the running of the company, including internal management affairs and legal responsibility and a Memorandum of association – This document will contain the names of the subscribers (initial shareholders) or guarantors agreeing to forming the company.
If forming your company online, the Articles of Association and Memorandum will be automatically created for you although you still have the option to create your own ‘Articles of association’ if you wish. If using the paper method, you will still have the opportunity to use prepared ‘Articles of association’ but you will need to include your own ‘Memorandum of association’ when posting your completed IN01.
Directors' service agreement
What is it?
This is a more complex contract of employment between a director/executive and an employer.
Why is it important?
It sets out the employment terms and conditions of employment and the standard areas of the employment.
Risks
As a director is more likely to be exposed to confidential information and have more responsibility this contract will include clauses which help to protect the business’s interests eg garden leave, confidentiality, non-solicitation clauses and restrictive covenants and ensure any intellectual property created by the employee- director belongs to the business..
Articles of Association
What is it?
Every company formed in England and Wales is required to have articles, without which a company cannot legally be formed. This requirement applies whether or not the company is public or private and whether limited by shares or by guarantee.
Why is it important?
The Articles of Association set out the rules for the running of the company, including internal management affairs and legal responsibility agreed by the shareholders or guarantors, directors.
The articles generally cover five essential areas:
- Limited liability of shareholders – a fixed sum limited to the nominal value of their shares.
- Shares and distributions – rights attaching to particular shares, issues and transfers of shares, payments of dividends and another share dealings;
- Shareholder decision making – quorum and voting at general meetings of shareholders and various decision-making options.
- Directors and decision making – number of directors, their powers and responsibilities and procedures for decision making; and
- Administrative arrangements.
Our corporate solicitors can provide you with legal advice on reviewing, drafting, or amending your articles of association and other constitutional documents. We can also provide you with bespoke articles of association.
Board Resolutions
What is it?
EMI Schemes
What is it?
An Enterprise Management Incentive (“EMI”) scheme is an approved employee share scheme designed for smaller companies and accessible to most trading companies.
Why is it important?
It allows employers to attract and retain key staff by rewarding them with share options (equity participation ) in the business in a tax efficient way, as a reward for their efforts within the business and/or to incentivise key staff, It is ideal for smaller entrepreneurial businesses that might not be able to match salaries paid elsewhere.
Board Minutes
What is it?
Share Certificates
What is it?
A Share Certificate (or stock certificate) is a written document which is evidence of a shareholder's ownership of shares in the company. The share certificate is generally issued by companies to shareholders after a transfer or transmission of shares or an allotment has been made.
Why is it important?
The share certificate will include the name of the company issuing the shares, its registration number, the details of the holders of the shares, the certificate number, the class(es) of shares being issued, date of issue, the amount paid on each share etc.
A share certificate can be issued by a private limited, public limited and unlimited liability company but cannot be issued by a company limited by guarantee as the company does not have shares.
Shareholders Agreement
What is it?
We always recommend that you put a shareholders’ agreement in place if your company has more than one shareholder.A shareholder agreement sets out the rights and obligations of each shareholder. The purpose of a shareholder agreement is to cover the most important issues in a business relationship:
- How the shareholders will run the company
- The mechanism for resolution of disputes between the shareholders(i.e. a “Deadlock” clause)
- The process for valuation of the company
- The transmission of shares in the event of the death or departure of a shareholder.
Why is it important?
A Shareholders agreement has several benefits:
- It provides each member with clear details of their responsibilities, financial input, voting arrangements and share transfers thereby making it a strong safeguard against legal disputes and disagreements.
- If carefully thought out and drafted it can protect individual shareholders and give them more protection that they would receive under the Model Articles of Association eg by giving each individual member a veto if the business is considering important changes
- It is an essential agreement to have when a company has more than one shareholder as there is nothing to regulate what happens if the shareholders have a dispute or a shareholder dies.
- It greatly reduces the risk of a shareholders’ dispute occurring and if it does it will be quicker to resolve.
- If a shareholder is not pulling their weight or is damaging the business’s reputation the to her shareholders can vote to remove him or her and buy his or her shares for a fair price. This would be difficult to do without a shareholder’s agreement and if just relying on the standard Articles.
Our Shareholders Agreement solicitors can provide you with a professionally drafted shareholders agreement at reasonable fixed fees. Contact us today!
Managing licenses
Running an online business
Protecting your IP
Business Relationships
Writing a business plan
Managing a company
Company formation
What is it?
Companies House is the UK’s ‘registrar of companies. A UK company can’t be formed without approval from Companies House therefore all company formation requests need to go through Companies House. You can apply directly or via company formation agents – who may charge slightly more than Companies House and are able to offer everything that Companies House offer, plus extra associated services.
Why is it important?
Company formation documents are the key pieces of documentation (i.e. the certificate of incorporation, memorandum of association and articles of association) that you will need to keep and refer to following your registration of your company with Companies
House. If you have access to a computer, you can form your company online in a matter of hours The prices vary but Companies House charge £12 if the formation is done online. Using the paper method via the actual IN01 form sent via post costs £40 for the standard 5-10 da service or £100 for the same-day service.
To form a company, you need the following information:
- Proposed company name
- The proposed Registered office address
- Shareholder(s) details
- Company director(s) details
- The share capital information and the particulars relating to each class of shares
- Details of the people with significant control details
You also need Articles of association – These set out the rules for the running of the company, including internal management affairs and legal responsibility and a Memorandum of association – This document will contain the names of the subscribers (initial shareholders) or guarantors agreeing to forming the company.
If forming your company online, the Articles of Association and Memorandum will be automatically created for you although you still have the option to create your own ‘Articles of association’ if you wish. If using the paper method, you will still have the opportunity to use prepared ‘Articles of association’ but you will need to include your own ‘Memorandum of association’ when posting your completed IN01.
Directors' service agreement
What is it?
This is a more complex contract of employment between a director/executive and an employer.
Why is it important?
It sets out the employment terms and conditions of employment and the standard areas of the employment.
Risks
As a director is more likely to be exposed to confidential information and have more responsibility this contract will include clauses which help to protect the business’s interests eg garden leave, confidentiality, non-solicitation clauses and restrictive covenants and ensure any intellectual property created by the employee- director belongs to the business..
Articles of Association
What is it?
Every company formed in England and Wales is required to have articles, without which a company cannot legally be formed. This requirement applies whether or not the company is public or private and whether limited by shares or by guarantee.
Why is it important?
The Articles of Association set out the rules for the running of the company, including internal management affairs and legal responsibility agreed by the shareholders or guarantors, directors.
The articles generally cover five essential areas:
- Limited liability of shareholders – a fixed sum limited to the nominal value of their shares.
- Shares and distributions – rights attaching to particular shares, issues and transfers of shares, payments of dividends and another share dealings;
- Shareholder decision making – quorum and voting at general meetings of shareholders and various decision-making options.
- Directors and decision making – number of directors, their powers and responsibilities and procedures for decision making; and
- Administrative arrangements.
Our corporate solicitors can provide you with legal advice on reviewing, drafting, or amending your articles of association and other constitutional documents. We can also provide you with bespoke articles of association.
Board Resolutions
What is it?
EMI Schemes
What is it?
An Enterprise Management Incentive (“EMI”) scheme is an approved employee share scheme designed for smaller companies and accessible to most trading companies.
Why is it important?
It allows employers to attract and retain key staff by rewarding them with share options (equity participation ) in the business in a tax efficient way, as a reward for their efforts within the business and/or to incentivise key staff, It is ideal for smaller entrepreneurial businesses that might not be able to match salaries paid elsewhere.
Board Minutes
What is it?
Share Certificates
What is it?
A Share Certificate (or stock certificate) is a written document which is evidence of a shareholder's ownership of shares in the company. The share certificate is generally issued by companies to shareholders after a transfer or transmission of shares or an allotment has been made.
Why is it important?
The share certificate will include the name of the company issuing the shares, its registration number, the details of the holders of the shares, the certificate number, the class(es) of shares being issued, date of issue, the amount paid on each share etc.
A share certificate can be issued by a private limited, public limited and unlimited liability company but cannot be issued by a company limited by guarantee as the company does not have shares.
Shareholders Agreement
What is it?
We always recommend that you put a shareholders’ agreement in place if your company has more than one shareholder.A shareholder agreement sets out the rights and obligations of each shareholder. The purpose of a shareholder agreement is to cover the most important issues in a business relationship:
- How the shareholders will run the company
- The mechanism for resolution of disputes between the shareholders(i.e. a “Deadlock” clause)
- The process for valuation of the company
- The transmission of shares in the event of the death or departure of a shareholder.
Why is it important?
A Shareholders agreement has several benefits:
- It provides each member with clear details of their responsibilities, financial input, voting arrangements and share transfers thereby making it a strong safeguard against legal disputes and disagreements.
- If carefully thought out and drafted it can protect individual shareholders and give them more protection that they would receive under the Model Articles of Association eg by giving each individual member a veto if the business is considering important changes
- It is an essential agreement to have when a company has more than one shareholder as there is nothing to regulate what happens if the shareholders have a dispute or a shareholder dies.
- It greatly reduces the risk of a shareholders’ dispute occurring and if it does it will be quicker to resolve.
- If a shareholder is not pulling their weight or is damaging the business’s reputation the to her shareholders can vote to remove him or her and buy his or her shares for a fair price. This would be difficult to do without a shareholder’s agreement and if just relying on the standard Articles.
Our Shareholders Agreement solicitors can provide you with a professionally drafted shareholders agreement at reasonable fixed fees. Contact us today!
Managing licenses
Running an online business
Protecting your IP
Business Relationships
Writing a business plan
Settlement agreements & Ref
Settlement agreement
What is it?
A Settlement Agreement is a binding contract between an employer and employee which settles claims that an employee may have against their employer. Whilst such an agreement is usually used in relation to be ending the employment it may also be used to settle a dispute that has arisen between an employer and employee where there is no intention by either party to end the employment.
Why is it important?
The terms of the settlement agreement must be mutually agreed between the employer and employee and must include a waiver of the specific claims which the employee has or could have. The agreement should contain a breakdown of the payments which have been agreed and should also state whether any of the payments are to be paid to the employee free of tax. Payments of up to £30k compensation can often be paid without deduction of tax if the payment is being made on an “ex gratia basis” (i.e. it is a payment you have voluntarily decided to make rather than one that you are legally obliged to make) or as compensation damages for a breach of contract.
Risks?
For a settlement agreement to be legally binding it must meet a number of statutory requirements eg it must be in writing, must specify the particular claims or complaints which the agreement is settling and the employee must have received advice on the terms and effect of the agreement from an independent solicitor or a trade union official whose advice is covered by insurance.
If the settlement agreement does not meet all of the statutory requirements, it will not be binding and the employee can still bring claims against the employer relating to the claims allegedly “settled” by the settlement agreement.It is a good idea to take proper legal advice before you decide to enter into a settlement agreement.
Reference letter
What is it?
A Reference letter is a letter that is usually written to testify to a person’s or (sometimes) a company’s skills, experience, character and or achievements. It is used in various circumstances eg when a candidate applies for a job and needs a reference to support their application, if a job candidate is made a job offer and is asked to provide a reference letter before the contract can be signed, a landlord asks a prospective tenant to provide a reference letter testifying to their character and good financial statues, a student applies for funding and is asked to provide a reference letter or a company applies for a tender and is asked to provide reference letters testifying to their ability to do the job and their trustworthiness.
Why is it important?
A Reference letter is a formal document and should be written in a business-like style. Do not mention any weaknesses that the candidate has or say anything that could be construed as derogatory or libel. If you honestly feel that the applicant has no good qualities or if you have had a dispute with them in the past you should tell them to get a reference letter from someone else. An employer must give a reference if there was a written agreement to do so and they are in a regulated industry such as Financial services.
Risks
You are under no obligation to give a work reference but if you do it must be fair and accurate. Your employee may be able to sue you in court and claim damages if you give a reference, they think is misleading or unfair. To do so the employee must be able to show that (a ) the reference is misleading or inaccurate and (b) they suffered a loss eg a job offer was withdrawn.It is essential that you do not lie in it or you could be sued.
Need some advice? Contact our employment solicitors.
Commercial notices
Notice of breach of covenants
What is it?
This is popularly called a Section 146 Notice (it is a notice required to be served by section 146 of the Law of Property Act 1925 and relates solely to business tenants) that warns a tenant who is in breach of covenant (other than the covenant to pay rent) of the landlord’s intention to forfeit the lease on ground of the breach of covenant.
Why is it important?
“Forfeiture” is the right of the landlord to re-enter the commercial property and take back possession of the property if a covenant has been breached.
For the notice to be valid and binding the notice must specify the breach of covenant and if the breach is capable of remedy , require the tenant to remedy it and pay monetary compensation to the landlord for the breach.
A landlord can only serve such a notice if the lease contains a right to forfeit the lease (i.e. a right of re-entry). The notice must also contain certain prescribed information. If the tenant does not remedy the breach within a reasonable time the landlord can start forfeiture proceedings in the County Court.
Risks
A landlord who wants to forfeit the lease must avoid “waiving” the breach of covenant. Waiver occurs where a landlord becomes aware of a breach of the lease but does not take action against the tenant within a reasonable period or acknowledges the continuation of the lease by for example demanding rent or service charges or accepting rent payments from the tenant.
Break notice
What is it?
Break Notices are akin to options and are therefore strictly construed by the courts . From the tenant’s perspective, a properly drafted Break Clause gives them the opportunity to avoid being tied into a lease that they can no longer afford. This is a safety-net for a tenant – especially if they are just starting out.
Understandably though, a landlord who is receiving a steady rental income may be reluctant to lose a tenant, particularly in tough economic times.
Risks
Any tenant seeking to exercise the option to break the lease must check the lease carefully and ensure they follow the landlord’s “break clause conditions” to the letter. It is crucial when taking a lease that a tenant understands that the conditions of the Break Clause can easily defeat an option to break unless followed to the letter. If the conditions are not strictly followed the termination is not valid and the tenant remains a lessee until the expiry of the lease, the next break clause date or until the tenant is able to assign the lease with the landlord’s consent if there is such a provision in the lease.
A properly advised tenant should refuse any condition, other than up-to date payment of principal rent and giving up occupation.
Tenant's agreement to exclude security of tenure
What is it?
The Landlord and Tenant Act 1954 provides tenants of business premises with rights of ‘security of tenure’. This means that once a business tenant’s lease expires, the tenant has the right to request a new lease on the same terms as the previous lease (subject to agreement on terms, such as the amount of rent, any legislative updates etc), except where the landlord has a statutory ground to refuse a new lease (for instance, if the tenant has failed to pay rent or the landlord wishes to redevelop the premises).
Why is it important?
When agreeing to enter into a commercial or business lease, one of the things that will be discussed when agreeing Heads of Terms is whether your lease will be ‘protected’ with security of tenure, or ‘contracted out’ i.e. excluded’ from security of tenure. It is quite common for landlords to require that security of tenure rights are excluded from a lease. They do this by asking the prospective tenant to sign a notice in front of an independent solicitor agreeing to the exclusion of security of tenure under the lease.
Risks
This notice means that a tenant of commercial premises will not have the automatic right to request a renewal of their lease at the end of the term of the lease, leaving the landlord free to let the property to another tenant at the end of the term. This is because landlords often wish to retain strict control over the occupation of their property. If security of tenure is excluded, you the tenant, must vacate the property at the end of the lease in accordance with its terms unless you have negotiated a new lease with the landlord separately.
Landlord's notice to exclude security of tenure
Section 25 Notice
What is it?
This is a notice by the landlord under s25 of the Landlord and Tenant Act 1954.
Why is it important?
It allows the landlord to start a procedure which will end either in the tenant being granted a new lease or in the tenant vacating. This notice cannot be given before the last year of the lease terms nor after the tenant has served a request for a new tenancy under s26 of the Act.
Risks
The s25 notice must state the date on which the landlord intends to bring the existing lease to an end.
Section 26 Notice
What is it?
This is a notice given by the tenant requesting a new tenancy upon the termination of the old tenancy.
Why is it important?
The s26 request must specify the date on which the existing lease is to end.
Risks
This notice cannot be served before the last year of the agreed lease term nor can it be served after the landlord has served a s25 notice.
Licence for alterations
What is it?
This is a licence from the landlord to the tenant giving the tenant the right to carry out specific works or alterations to the property that is being let. The alterations may be major or minor.
Why is it important?
The Licence should include provisions as to the manner in which the tenant will carry out the works, timescales, reinstatement and (to the extent applicable) the Construction (Design and Management) Regulations 2015. Drawings and specifications showing the proposed works should be attached to the Licence so that it is clear what the landlord is consenting to.
If the proposed alterations are not substantial (e.g. the erection of demountable partitioning or signage) you can use a simple Letter- Licence to Alter.
Section 27 Notice
What is it?
Managing licenses
Running an online business
Protecting your IP
Business Relationships
Writing a business plan
Letting a commercial property
Share Purchase Agreement
What is it?
A Share purchase agreement (SPA) is an agreement setting out the terms and conditions relating to the sale and purchase of shares in a company. Share purchase agreements are often complex documents which can become lengthy and create significant delay, friction and cost if not dealt with by experienced, business minded lawyers.
Why is it important?
There is often a choice and negotiation over whether it’s best for either or both parties to buy/sell assets rather than shares. This would depend on whether the current owner (seller) is a limited company. If not, there can be no share sale! Further, where a buyer wants to preserve as many customer relations as possible, they may elect to buy the shares as opposed to assets.
The seller’s solicitor usually draws up the draft share purchase agreement.
Risks
While the buyer’s solicitor will try to protect the buyer the interest of the seller’s solicitor is to minimise this protection, in particular by limiting the seller’s liability for misrepresentation. However, in practice, where there is fraudulent misrepresentation the seller will still be liable so the buyer may accept such clauses since they are not valid if the seller can prove fraudulent misrepresentation.
Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.
Asset Purchase Agreement
What is it?
An asset purchase agreement is an agreement setting out the terms and conditions relating to the sale and purchase of assets of a business. In an asset purchase, the company itself will be selling the assets, whilst in a share sale, the individual shareholders will be the sellers.
Occasionally a buyer will prefer to acquire certain assets of a business rather than acquire all of the shares in a company and therefore, both its assets and liabilities.
A buyer will normally prefer to buy the assets of a business, while the seller will prefer to sell the shares. The main benefit of an asset purchase is that a buyer may selectively pick the assets and liabilities they want to acquire and there is generally less risk of hidden liabilities than with a share purchase.
Risks
The main disadvantage of an asset sale, as opposed to a share purchase agreement is that each item must be transferred in accordance with its proper rules and made enforceable against third parties (eg through consents and approvals). This is especially the case for customer contracts, as a third party may view the transaction as an opportunity to renegotiate their contract thereby adding delay and additional costs to the transaction.
In addition, there may be other important contracts that are non-transferrable, or licences and consents unique to the seller which may not be transferrable.
In an asset sale it is vital to identify what exactly is being purchased. Assets transferred as part of an Asset purchase agreement may include:
- Plant and machinery.
- Premises;
- Stock;
- Contracts;
- Know-how; and
- Goodwill.
Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.
Disclosure Letter
What is it?
A Non-Disclosure letter or Non-Disclosure Agreement, also called a Confidentiality Agreement, is a legal contract between two or more parties by which the parties agree not to disclose information (which is intended to be kept secret) that they have shared with each other during a business relationship to third parties.
Why is it important?
This Agreement may either be one-way (unilateral) or two-way (mutual), depending on whether both parties will be providing the secret information. If one party will be providing the secret information to the other, it is called a Unilateral Non-Disclosure Agreement.
For example, where an inventor of an idea is sharing the idea with another person, the inventor is the disclosing party and the other party is the receiving party. If the two parties will share the secret information between themselves, it is called a Mutual Non-Disclosure Agreement.
Sale and Purchase of Commerial Property
Letter ending a contract
- The letter contains a clear description of the reasons for the termination of the contract.
- The date of termination is mentioned.
- The letter thanks the other party for their services.
Our contract solicitors can provide you with a bespoke letter for a reasonable fixed fee that you can use to cancel a contract or agreement.
Letter assigning a contract
What is it?
Transferring a contract from one party to another is known as ‘assigning’ a contract or ‘an assignment’ of the contract. An assignment ends one party’s involvement in the contract and transfers their contractual rights, benefits and interests to a new party.
Risks
Some contracts may contain a clause prohibiting assignment; other contracts may require the other party to consent to the assignment. Unless assignment is prohibited in a contract, a party may assign their rights to third party without the consent of the other party to the agreement. A letter of assignment is used to effect the assignment and will be signed by the outgoing party and the incoming party.
Buying & Selling a business
Share Purchase Agreement
What is it?
A Share purchase agreement (SPA) is an agreement setting out the terms and conditions relating to the sale and purchase of shares in a company. Share purchase agreements are often complex documents which can become lengthy and create significant delay, friction and cost if not dealt with by experienced, business minded lawyers.
Why is it important?
There is often a choice and negotiation over whether it’s best for either or both parties to buy/sell assets rather than shares. This would depend on whether the current owner (seller) is a limited company. If not, there can be no share sale! Further, where a buyer wants to preserve as many customer relations as possible, they may elect to buy the shares as opposed to assets.
The seller’s solicitor usually draws up the draft share purchase agreement.
Risks
While the buyer’s solicitor will try to protect the buyer the interest of the seller’s solicitor is to minimise this protection, in particular by limiting the seller’s liability for misrepresentation. However, in practice, where there is fraudulent misrepresentation the seller will still be liable so the buyer may accept such clauses since they are not valid if the seller can prove fraudulent misrepresentation.
Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.
Asset Purchase Agreement
What is it?
An asset purchase agreement is an agreement setting out the terms and conditions relating to the sale and purchase of assets of a business. In an asset purchase, the company itself will be selling the assets, whilst in a share sale, the individual shareholders will be the sellers.
Occasionally a buyer will prefer to acquire certain assets of a business rather than acquire all of the shares in a company and therefore, both its assets and liabilities.
A buyer will normally prefer to buy the assets of a business, while the seller will prefer to sell the shares. The main benefit of an asset purchase is that a buyer may selectively pick the assets and liabilities they want to acquire and there is generally less risk of hidden liabilities than with a share purchase.
Risks
The main disadvantage of an asset sale, as opposed to a share purchase agreement is that each item must be transferred in accordance with its proper rules and made enforceable against third parties (eg through consents and approvals). This is especially the case for customer contracts, as a third party may view the transaction as an opportunity to renegotiate their contract thereby adding delay and additional costs to the transaction.
In addition, there may be other important contracts that are non-transferrable, or licences and consents unique to the seller which may not be transferrable.
In an asset sale it is vital to identify what exactly is being purchased. Assets transferred as part of an Asset purchase agreement may include:
- Plant and machinery.
- Premises;
- Stock;
- Contracts;
- Know-how; and
- Goodwill.
Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.
Disclosure Letter
What is it?
A Non-Disclosure letter or Non-Disclosure Agreement, also called a Confidentiality Agreement, is a legal contract between two or more parties by which the parties agree not to disclose information (which is intended to be kept secret) that they have shared with each other during a business relationship to third parties.
Why is it important?
This Agreement may either be one-way (unilateral) or two-way (mutual), depending on whether both parties will be providing the secret information. If one party will be providing the secret information to the other, it is called a Unilateral Non-Disclosure Agreement.
For example, where an inventor of an idea is sharing the idea with another person, the inventor is the disclosing party and the other party is the receiving party. If the two parties will share the secret information between themselves, it is called a Mutual Non-Disclosure Agreement.
Operating as a Sole Trader
Licence to assign
Licence to sublet
Sale Agreement
Purchase Agreement
Ending or Assigning an Existing Agreement
Letter ending a contract
- The letter contains a clear description of the reasons for the termination of the contract.
- The date of termination is mentioned.
- The letter thanks the other party for their services.
Our contract solicitors can provide you with a bespoke letter for a reasonable fixed fee that you can use to cancel a contract or agreement.
Letter assigning a contract
What is it?
Transferring a contract from one party to another is known as ‘assigning’ a contract or ‘an assignment’ of the contract. An assignment ends one party’s involvement in the contract and transfers their contractual rights, benefits and interests to a new party.
Risks
Some contracts may contain a clause prohibiting assignment; other contracts may require the other party to consent to the assignment. Unless assignment is prohibited in a contract, a party may assign their rights to third party without the consent of the other party to the agreement. A letter of assignment is used to effect the assignment and will be signed by the outgoing party and the incoming party.
Health & Safety
Invitation letter to a disciplinary appeal hearing for misconduct
What is it?
Make sure you do things right when you discipline an employee. Our employment solicitors can provide you with a disciplinary hearing letter/notice to be sent to the employee which sets out in clear and simple terms the disciplinary allegations, process to be followed, the employee's rights and potential sanctions.
Why is it important?
If you are formally disciplining an employee for misconduct, this letter ensures that you are complying with the unfair dismissal laws. It also meets the requirements of the statutory ACAS Code of Practice on Disciplinary and Grievance Procedures. It is always best practice to give the employee a right to appeal any misconduct decision. The letter should tell the employee they must appeal in writing with their grounds of appeal. If you accept an appeal by the employee, you should respond with a letter inviting the employee to an appeal hearing for misconduct.
Risks
Non-compliance with the ACAS Code of Practice on Disciplinary and Grievance Procedures will be taken into account by an employment tribunal when deciding whether an employee has been treated fairly and can also result in the tribunal increasing the amount of compensation awarded your employee if the case went to court.
Invitation letter to an appeal hearing for misconduct
What is it?
The right to appeal against the outcome of disciplinary action is an important element of a fair disciplinary process. Where an employee appeals against a disciplinary sanction, the employer should invite them to a disciplinary appeal hearing.
Why is it important?
The ACAS Code of Practice on Disciplinary and Grievance Procedures states that the employee should be given the right to appeal against any disciplinary sanction or decision.Our employment solicitors can provide you with an invitation letter to an appeal hearing that helps ensure that your processes are watertight. The invitation should include information about the employee's right to be accompanied at the appeal hearing.
Risks
Non-compliance with the ACAS Code of Practice on Disciplinary and Grievance Procedures will be taken into account by an employment tribunal when deciding whether an employee has been treated fairly and can also result in the tribunal increasing the amount of compensation awarded if the case went to court.
Disciplinary outcome letter for misconduct - warning or no action
What is it?
This is a letter that can be used to inform the employee of the outcome of the disciplinary meeting when the outcome is a warning or that no further action is to be taken by the employer.
Invitation letter to a performance appeal hearing
What is it?
This is a letter that should be used to invite an employee to a performance appeal hearing.
Invitation letter to a performance appraisal
What is it?
An appraisal is a formal process that allows you and a member of staff to assess the staff member’s performance over a period of time eg on a 6 month or 12 month basis. A detailed appraisal has a number of benefits for you and your employees.
Why is it important?
For example, it gives you the opportunity to:
1. review and provide feedback on their performance and set objectives to maximise performance.
2. It also gives the employee the opportunity to comment on their performance, suggest improvements and bring any problems to your attention.
3. It can therefore assist in motivating employees, resolution of problems and the prevention of legal disputes.
Our employment solicitors can provide you with an invitation to attend an appraisal meeting letter tailored to your specific requirements. This letter sets the date for the meeting, who will conduct the meeting and whether the member of staff needs to bring any particular documents or information to the meeting.
Contact our employment law solicitors on 01234 938089.
Poor performance outcome letter - warning or no action
What is it?
This is a letter that can be used to inform the employee of the outcome of the poor performance meeting when the outcome is a warning or no further action is to be taken.
Disciplinary procedure
What is it?
A disciplinary procedure is a formal way for an employer to deal with an employee’s unacceptable or improper behaviour (‘misconduct’) or performance (‘capability’).
Why is it important?
You should put your disciplinary procedure in writing and make it easily available to all staff. IIt should say what performance and behaviour might lead to disciplinary action and what action your employer might take.
It should also include the name of someone you can speak to if you do not agree with your employer’s disciplinary decision.
Disciplinary steps : Your disciplinary procedure should include the following steps:
-
A letter setting out the issue.
-
A meeting to discuss the issue.
-
A disciplinary decision.
-
A chance to appeal this decision.
Risks
Before starting a disciplinary procedure against a member of staff , you should first see whether the problem can be resolved in an informal way. This can often be the quickest and easiest solution.
If you need help in resolving an employment matter or dispute, please contact our employment solicitors on 01234 938089. We can provide you with advice on a fixed fee basis.
Suspension Letter
What is it?
Dismissal letter for misconduct
What is it?
Dismissal letter for poor performance
What is it?
Gross misconduct dismissal letter
What is it?
Dismissal letter for employees without unfair dismissal rights
What is it?
Appeal letter
What is it?
This is a letter from an employee against whom a disciplinary sanction has been imposed appealing against the dismissal.
If you need help in resolving an employment matter or dispute, please contact our employment solicitors on 01234 938089. We can provide you with advice on a fixed fee basis.
Planning & Highways
Letter ending a contract
- The letter contains a clear description of the reasons for the termination of the contract.
- The date of termination is mentioned.
- The letter thanks the other party for their services.
Our contract solicitors can provide you with a bespoke letter for a reasonable fixed fee that you can use to cancel a contract or agreement.
Letter assigning a contract
What is it?
Transferring a contract from one party to another is known as ‘assigning’ a contract or ‘an assignment’ of the contract. An assignment ends one party’s involvement in the contract and transfers their contractual rights, benefits and interests to a new party.
Risks
Some contracts may contain a clause prohibiting assignment; other contracts may require the other party to consent to the assignment. Unless assignment is prohibited in a contract, a party may assign their rights to third party without the consent of the other party to the agreement. A letter of assignment is used to effect the assignment and will be signed by the outgoing party and the incoming party.
Managing employee performance
Invitation letter to a disciplinary appeal hearing for misconduct
What is it?
Make sure you do things right when you discipline an employee. Our employment solicitors can provide you with a disciplinary hearing letter/notice to be sent to the employee which sets out in clear and simple terms the disciplinary allegations, process to be followed, the employee's rights and potential sanctions.
Why is it important?
If you are formally disciplining an employee for misconduct, this letter ensures that you are complying with the unfair dismissal laws. It also meets the requirements of the statutory ACAS Code of Practice on Disciplinary and Grievance Procedures. It is always best practice to give the employee a right to appeal any misconduct decision. The letter should tell the employee they must appeal in writing with their grounds of appeal. If you accept an appeal by the employee, you should respond with a letter inviting the employee to an appeal hearing for misconduct.
Risks
Non-compliance with the ACAS Code of Practice on Disciplinary and Grievance Procedures will be taken into account by an employment tribunal when deciding whether an employee has been treated fairly and can also result in the tribunal increasing the amount of compensation awarded your employee if the case went to court.
Invitation letter to an appeal hearing for misconduct
What is it?
The right to appeal against the outcome of disciplinary action is an important element of a fair disciplinary process. Where an employee appeals against a disciplinary sanction, the employer should invite them to a disciplinary appeal hearing.
Why is it important?
The ACAS Code of Practice on Disciplinary and Grievance Procedures states that the employee should be given the right to appeal against any disciplinary sanction or decision.Our employment solicitors can provide you with an invitation letter to an appeal hearing that helps ensure that your processes are watertight. The invitation should include information about the employee's right to be accompanied at the appeal hearing.
Risks
Non-compliance with the ACAS Code of Practice on Disciplinary and Grievance Procedures will be taken into account by an employment tribunal when deciding whether an employee has been treated fairly and can also result in the tribunal increasing the amount of compensation awarded if the case went to court.
Disciplinary outcome letter for misconduct - warning or no action
What is it?
This is a letter that can be used to inform the employee of the outcome of the disciplinary meeting when the outcome is a warning or that no further action is to be taken by the employer.
Invitation letter to a performance appeal hearing
What is it?
This is a letter that should be used to invite an employee to a performance appeal hearing.
Invitation letter to a performance appraisal
What is it?
An appraisal is a formal process that allows you and a member of staff to assess the staff member’s performance over a period of time eg on a 6 month or 12 month basis. A detailed appraisal has a number of benefits for you and your employees.
Why is it important?
For example, it gives you the opportunity to:
1. review and provide feedback on their performance and set objectives to maximise performance.
2. It also gives the employee the opportunity to comment on their performance, suggest improvements and bring any problems to your attention.
3. It can therefore assist in motivating employees, resolution of problems and the prevention of legal disputes.
Our employment solicitors can provide you with an invitation to attend an appraisal meeting letter tailored to your specific requirements. This letter sets the date for the meeting, who will conduct the meeting and whether the member of staff needs to bring any particular documents or information to the meeting.
Contact our employment law solicitors on 01234 938089.
Poor performance outcome letter - warning or no action
What is it?
This is a letter that can be used to inform the employee of the outcome of the poor performance meeting when the outcome is a warning or no further action is to be taken.
Disciplinary procedure
What is it?
A disciplinary procedure is a formal way for an employer to deal with an employee’s unacceptable or improper behaviour (‘misconduct’) or performance (‘capability’).
Why is it important?
You should put your disciplinary procedure in writing and make it easily available to all staff. IIt should say what performance and behaviour might lead to disciplinary action and what action your employer might take.
It should also include the name of someone you can speak to if you do not agree with your employer’s disciplinary decision.
Disciplinary steps : Your disciplinary procedure should include the following steps:
-
A letter setting out the issue.
-
A meeting to discuss the issue.
-
A disciplinary decision.
-
A chance to appeal this decision.
Risks
Before starting a disciplinary procedure against a member of staff , you should first see whether the problem can be resolved in an informal way. This can often be the quickest and easiest solution.
If you need help in resolving an employment matter or dispute, please contact our employment solicitors on 01234 938089. We can provide you with advice on a fixed fee basis.
Suspension Letter
What is it?
Dismissal letter for misconduct
What is it?
Dismissal letter for poor performance
What is it?
Gross misconduct dismissal letter
What is it?
Dismissal letter for employees without unfair dismissal rights
What is it?
Appeal letter
What is it?
This is a letter from an employee against whom a disciplinary sanction has been imposed appealing against the dismissal.
If you need help in resolving an employment matter or dispute, please contact our employment solicitors on 01234 938089. We can provide you with advice on a fixed fee basis.
Reorganisation & Redundancies
Share Purchase Agreement
What is it?
A Share purchase agreement (SPA) is an agreement setting out the terms and conditions relating to the sale and purchase of shares in a company. Share purchase agreements are often complex documents which can become lengthy and create significant delay, friction and cost if not dealt with by experienced, business minded lawyers.
Why is it important?
There is often a choice and negotiation over whether it’s best for either or both parties to buy/sell assets rather than shares. This would depend on whether the current owner (seller) is a limited company. If not, there can be no share sale! Further, where a buyer wants to preserve as many customer relations as possible, they may elect to buy the shares as opposed to assets.
The seller’s solicitor usually draws up the draft share purchase agreement.
Risks
While the buyer’s solicitor will try to protect the buyer the interest of the seller’s solicitor is to minimise this protection, in particular by limiting the seller’s liability for misrepresentation. However, in practice, where there is fraudulent misrepresentation the seller will still be liable so the buyer may accept such clauses since they are not valid if the seller can prove fraudulent misrepresentation.
Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.
Asset Purchase Agreement
What is it?
An asset purchase agreement is an agreement setting out the terms and conditions relating to the sale and purchase of assets of a business. In an asset purchase, the company itself will be selling the assets, whilst in a share sale, the individual shareholders will be the sellers.
Occasionally a buyer will prefer to acquire certain assets of a business rather than acquire all of the shares in a company and therefore, both its assets and liabilities.
A buyer will normally prefer to buy the assets of a business, while the seller will prefer to sell the shares. The main benefit of an asset purchase is that a buyer may selectively pick the assets and liabilities they want to acquire and there is generally less risk of hidden liabilities than with a share purchase.
Risks
The main disadvantage of an asset sale, as opposed to a share purchase agreement is that each item must be transferred in accordance with its proper rules and made enforceable against third parties (eg through consents and approvals). This is especially the case for customer contracts, as a third party may view the transaction as an opportunity to renegotiate their contract thereby adding delay and additional costs to the transaction.
In addition, there may be other important contracts that are non-transferrable, or licences and consents unique to the seller which may not be transferrable.
In an asset sale it is vital to identify what exactly is being purchased. Assets transferred as part of an Asset purchase agreement may include:
- Plant and machinery.
- Premises;
- Stock;
- Contracts;
- Know-how; and
- Goodwill.
Please contact us if you require specialist commercial lawyers to review, draft, negotiate, amend or generally advise on a share purchase agreement.
Disclosure Letter
What is it?
A Non-Disclosure letter or Non-Disclosure Agreement, also called a Confidentiality Agreement, is a legal contract between two or more parties by which the parties agree not to disclose information (which is intended to be kept secret) that they have shared with each other during a business relationship to third parties.
Why is it important?
This Agreement may either be one-way (unilateral) or two-way (mutual), depending on whether both parties will be providing the secret information. If one party will be providing the secret information to the other, it is called a Unilateral Non-Disclosure Agreement.
For example, where an inventor of an idea is sharing the idea with another person, the inventor is the disclosing party and the other party is the receiving party. If the two parties will share the secret information between themselves, it is called a Mutual Non-Disclosure Agreement.