This briefing has been compiled by solicitors in Withy King’s commercial teams based in Swindon to help directors keep on top of the latest legal developments which may affect them in their professional or personal lives.
Is your commercial contract Brexit-proof?
With the upcoming referendum fast approaching, it’s a good idea to start thinking about which of your commercial contracts may be affected. In the event of a Brexit, clauses relating to disputes may need to be amended if your UK business regularly deals with customers or suppliers based in Europe. Payment terms may also need to be revisited as a Brexit could remove the benefit UK businesses currently enjoy in the form of the EU’s Late Payment Directive and change the way commercial debts are enforced across the continent.
To discuss these and other possible implications, please contact Marianne Johns in our Commercial Disputes team at marianne.johns@withyking.co.uk
New register required
The majority of UK limited companies and LLPs are now required to keep a ‘Persons with Significant Control’ register (Register), following the introduction of new rules in April. The Register needs to identify the ultimate beneficial owners and controllers of a company or LLP. Companies and LLPs that have not done so already need to quickly obtain the required information and record this in their statutory books. From June 30, the information will need to be confirmed to Companies House at least every 12 months.
For more information regarding the Register or any other business issue, please contact Rishi Ladwa in our Corporate and Commercial team at rishi.ladwa@withyking.co.uk.
Beware continuing liability if you assign your property lease
If your business assigned its lease to BHS or Austin Reed (or any other business which gets into difficulty), your old landlord could come after you for their breaches of the lease, including payment of their rent arrears. This is unfair, but you probably signed an Authorised Guarantee Agreement (AGA) in which you guaranteed that the replacement tenant would comply with the lease. Thorough due diligence checks on any prospective replacement tenant are essential. Budgets should allow a contingency for your old landlord knocking at your door. You need keen eyed lawyers to draft the AGA in the first place and then to scrutinise it in case your liability can be challenged. Worst case, you do have rights to re-take control of the lease.
To discuss any issues relating to your lease, please contact Greg Callard in our Commercial Property team at greg.callard@withyking.co.uk
Safeguard your business interests against divorce
The courts are increasingly taking the view that marital agreements governing the financial consequences of a divorce should be recognised. These agreements are only likely to be ignored in circumstances where it would not be fair to hold the parties to it. So if you want to protect your business, or ring-fence other assets – perhaps inherited ones – it is worth trying to formalise your arrangements through a legal agreement rather than face the prospect of the court having an unlimited discretion to do whatever they feel is appropriate.
For a confidential discussion about any divorce-related issue, please contact Victoria Emens in our Family team at victoria.emens@withyking.co.uk
Changes to the assignment of leases
Businesses dealing with tenant insolvencies or conducting due diligence on potential investment properties need to be aware that tenants who hold a lease granted on or after January 1, 1996, may not assign it to the tenant’s guarantor, following a recent High Court judgement. More stringent restrictions may be required when drafting clauses permitting intra-group assignments of leases and care taken when consenting to corporate restructuring.
For more on this or advice on any property issue, please contact Nial Ledingham in our Commercial Property team at nial.ledingham@withyking.co.uk
The tax benefits of gifting shares
Gifting shares is often overlooked and yet it is an excellent way of making a tax effective gift to charity. At a time when charities are facing significant funding pressures – not to mention contending with swingeing cuts – making the most of all tax effective ways of giving to charity is a great start to helping out the causes you care about. Where you make a gift of shares to charity you are entitled to both Income Tax (IT) relief and Capital Gains Tax (CGT) relief. IT relief is available by taking away the value of the shares being donated from your total taxable income, whereas CGT relief is available in relation to any gain there may be. If shares are sold for a sum above their purchase price then tax may be payable.
To find out more or to discuss any aspect of estate planning, please contact Samantha O’Sullivan in our Private Client team at Samantha.osullivan@withyking.co.uk
