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Protecting your Cashflow
"Times are hard" is an overused phrase but it is also a true one these days. For small to medium sized businesses ("SMEs") one of the big reasons for this is difficulty in getting customers to pay their bills on time, or at all.
Guidance for good governance of small companies
The overwhelming majority of companies in the UK are not listed and tend to be small to medium enterprises or start up companies that are under the ownership and control of its founder members or their family and the Institute of Directors has issued guidance for the good governance of such Companies.
Slater Heelis becomes LLP and Appoints Three New Equity Members
On 1 June 2012 Sale based law firm Slater Heelis converted to a limited liability partnership. From that date the business of Slater Heelis transferred to Slater Heelis LLP which will operate in a way similar to that of a limited company. The move comes as three of the firm’s longest serving members of staff, Will Henson (Partner), Chris Partington (Partner & Head of Private Client) and Mark Heptinstall (Partner & Collaborative Lawyer) are made equity members. Read more
Are you entitled to compensation if your flight is delayed this summer?
You have important rights if your flight is delayed or cancelled, however, those rights will vary depending on your circumstances and whether you are travelling with an EU carrier or a non-EU carrier.
Read more
Online Sales and The Office of Fair Trading
Introduction
The Office for Fair Trading ("OFT") has issued a report following a recent
investigation into 156 of the top online retailers' website terms and conditions to
establish whether or not they are in compliance with consumer protection laws. Read more..
Management of Asbestos in Schools
Introduction
Sherborne School in Dorset has recently been fined £60,000 and ordered to pay £13,000 costs for a breach of Regulation 4(8) of The Control of Asbestos Regulations 2006 (the "Regulations"). Read more...
Child Abduction
In the last decade the number of recorded cases of a child or children being abducted and taken abroad by an estranged parent has increased by 88%. Many people do not realise that it is illegal for a parent to take their child out of the country without the permission of the other parent and all people with parental responsibility for that child. It is a criminal offence that is on the rise but only occasionally hits the headlines. The most recent news story is of 6 year old Atiya Anjum-Wilkinson who has just been returned to her British mother 3 years after being taken illegally to Pakistan.
The Hague Convention on child abduction was drafted to ensure the swift return of children under the age of 16 who have been taken out of their own jurisdiction without consent. It provides for strict procedures to be adhered to for the return of children to their home country. Unfortunately, not all countries have signed up to the Convention including the majority of Asia, the Middle East, Africa and Russia. Retrieving a child from these countries is notoriously difficult and sadly, those cases are often unresolved.
There are precautionary measures that can be taken where there is a serious risk of abduction. A court can make an order for the delivery up of passports under the Children Act 1989 where they are being withheld by one parent. An order can also be made for the prevention of issue of passports. The police can put in place a port alert system but this is only of use where there is some information as to the likely journey that is being attempted.
Child abduction is a heart-wrenching issue. The Foreign Office has launched a campaign to raise public awareness. It is hoped that with increased public knowledge and understanding of this crime, the number of cases will decrease.
08.01.2013 - Sally Ingham
Upcoming changes to the Share Buyback Scheme
by Richard Riley
Introduction
New regulations regarding share buy backs by companies are due to come into force on 30 April 2013 with a view to simplifying the procedure and making it easier for a company to effect a buy back.
Changes
The main changes that will come into force are:
1) The level of shareholder approval required for a buyback by a private company will be reduced to a simple majority rather than the current 75%.
2) A private company will be able to buy back a small number of shares without having to specify that the purchase funds come from distributable profits. The number of shares that this will apply to will be the lower of shares with a value of £15,000, or the equivalent of 5% of the share capital in any financial year. This is subject to there being a provision in the company's Articles of Association allowing this, or a special resolution being passed.
3) Private companies will be able to hold shares in treasury rather than having to cancel them following a buyback.
4) If the buyback is connected to an employee share scheme, a private company will be able to:
a. pay for the shares in instalments;
b. authorise multiple buybacks in advance;
c. finance buybacks out of capital (subject to the passing of a special resolution and the signing of a solvency statement by the directors).
Conclusion
The regulations should remove the more burdensome aspects of the current buyback regime and go some way towards implementing the recommendations of the Nuttal Review. It is likely that we will see a rise in employee ownership of private companies as a result.
If you are interested in taking advantage of the new regime, please call us on 0161 969 3131 and ask to speak to a solicitor in our Corporate Department.
Can a Warranty also be a Representation?
by Richard Riley
Introduction
A recent case has looked at the differences between warranties and representations when purchasing a business and whether a breach of a warranty can amount to a misrepresentation.
The Facts
In Sycamore Bidco Limited v Sean Breslin and Andrew Dawson a privately backed management buyout team acquired an insurance broking firm at auction. The buyout team had based their valuation of the firm and therefore the amount they were prepared to pay for it on the basis of accounts provided to them which they later discovered contained a number of errors which had led to turnover figures being overstated by £300,000.
The buyout team brought a claim for breach of the accounts warranties in the business purchase contract and further claimed that these breaches amounted to misrepresentations.
The difference between a claim for breach of warranty and a claim for misrepresentation is that damages for a breach of warranty claim aim to put the wronged party in the position it would have been in had the warranty been true - which in this case would result in a reduction in the purchase price.
Damages for a misrepresentation claim on the other hand aim to put the wronged party in the position it would have been in had the misrepresentation not been made - in this case this would amount to the full purchase price as the purchaser claimed that it would not have purchased the company at all if it had known of the errors.
This resulted in a £12m difference in potential damages.
Decision
The Court highlighted that the warranties were clearly defined and described as warranties in the contract and that further distinctions were made between warranties and representations.
The contract also limited liability significantly for warranties but did not do so for representations. The Judge stated that it "would be a strange and uncommercial state of affairs, and can hardly have been intended" for the sellers to have deprived themselves of protection had the warranties been capable of being representations.
The Judge also highlighted that representations are generally made prior to entering into a contract in order to induce a party to enter into it. As the alleged misrepresentation was in the contract itself, it could not have induced the purchaser into it.
As such, the Court agreed that there had been a breach of warranty but dismissed the misrepresentation claim.
Conclusion
Whilst the decision was not an unusual one and is in line with existing case law, it does highlight the importance of being clear with the representations you make (or don't make) if you are selling a business as the manner in which you make these can have a significant effect on the damages that might be paid if there are any problems later on.
If you are looking to buy or sell a business and require legal assistance, please call us on 0161 969 3131 and ask to speak to a solicitor in our Corporate Department.
Consumer Bill or Rights
Introduction
It has been announced that a draft Consumer Bill of Rights (the “draft Bill”) will be published later in the Summer following on from a recent consultation by the Department for Business Innovation and Skills.
Read more
Archive
Can a Warranty also be a Representation?
Upcoming changes to the Share Buyback Scheme
Slater Heelis LLP appointed to Northwest Automotive Alliance Panel
25.06.12
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Slater Heelis LLP is a limited liability partnership registered in
England and Wales with registered number OC371694 and whose registered
office is at Lloyds Bank Buildings, 16 School Road, Sale, Cheshire M33 7XP.
Authorised and regulated by the Solicitors Regulation Authority and governed
by the SRA Code of Conduct (details of which can be found
at www.sra.org.uk/handbook). Our VAT number is 727 0283 44.