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Starting a business &Â Ince, in any case incegd.com Europe & Middle East & Asia
Starting a business / 2020
Ince
Starting a business / 2020
Starting a business? Key tips for start-up businesses We have created the ‘Ince start-up pack’; a series of information sheets to assist and support start-up businesses in their early stages. Specifically, the start-up pack highlights the key legal issues business owners should consider on setting up a business. This will make sure your business has the correct legal framework and protection from the outset – to guarantee the start-up business has every chance of success. We understand that when starting a new business, costs are tight, but asking for advice from lawyers, accountants or tax advisers from the outset can help business owners navigate some potential pitfalls. For example, advisers will be able to ensure that: • The business structure reduces any exposure to personal liability; • The business is set up in a tax efficient manner; • The business enters into contracts with third parties on favourable terms; • The business protects its intellectual property rights on both creation and disclosure.
Failure to ensure these factors could be costly to a start-up business. Throughout our start–up pack, we provide useful legal knowledge for new business owners in a series of key fact sheets, including: 1.
Setting up your business
2.
Shareholders’ Agreements
3.
Terms and Conditions of Business
4.
Intellectual Property considerations
5.
Confidentiality Agreements / NDAs
6.
Employment law essentials
7.
New business leases
8.
Immigration issues
If you are considering or have recently started a new business, this start-up pack provides some of the legal knowledge required to move your start-up in the right direction.
We are here for you and your business during the Coronavirus pandemic. For more information to help and protect your start-up business during these unprecedented times, visit our website.
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Setting up your business / 2020
01- Setting up your business &Â Ince
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Setting up your business / 2020
Setting up your business There are several different ownership structures to choose from when setting up a business in the UK. The adopted business structure is important as it will define the legal liabilities which a business may incur whilst operating. The main types of business structures are: • Sole traders; • Partnerships; • Limited companies, and; • Limited Liability Partnerships (LLPs). Sole traders Whilst running a business as a sole trader, you are running the business as an individual, and the business will not have a separate identity. This means that as a sole trader you will be responsible for the liabilities of the business. You will therefore be personally liable for any loss which the business makes.
Sometimes the shareholders are also directors, but this is not a requirement. The law imposes duties on the directors in running the limited company. • Constitution - the Articles of Association are the main constitutional document of a company. These regulate the company’s internal affairs and contain provisions dealing with matters such as directors’ powers, proceedings of meetings, conduct at board meetings and so on. Sometimes shareholders will enter into a separate shareholders’ agreement (see information sheet - ‘Do I need a Shareholders’ Agreement?’) • Separate legal entity – a limited company is unique in the sense that is has a ‘separate legal entity’. This essentially means that it can buy, hold and sell property in the same way as a person can. A limited company will therefore have its own benefits and liabilities. Any profit (subject to tax) made in the business will be owned by the company. Then, the company will distribute its profits to the shareholders by way of dividend and when the company is wound up, it will be divided amongst the shareholders in proportion to their shareholdings.
Partnerships Under a partnership, you and your partners will be personally responsible for the business. Unlike a limited company or LLP, a partnership is not a separate legal entity. As a result, not only will the profits of the business be shared amongst the partners, but the partners will also be responsible for a share of any losses that the business makes and also for the debts incurred on behalf of the business. Limited company This is the most common type of company ownership structure used in the UK. • Structure – a company has: •
‘Members’ or ‘Shareholders’ – who are the people who own the shares in the company; and
•
‘Directors’ – who are the people responsible for running the company.
• Limited liability – most limited companies are limited by shares; this means that the shareholders will only be liable for the company’s debts up to the value of the shares which they own but for which they have not yet paid. As the shares are usually paid for when the company is set up, this in essence means that the shareholders will not have any liability for the debts of the company in normal circumstances. The directors will not be responsible for the debts of the business (unless they have breached their directors’ duties or broken the law such as fraudulent or wrongful trading). Public company A company can also be a ‘public limited company’. This is where the aggregate nominal value of all shares in issue must be at least £50,000, with £12,500 of these shares having already been paid for by the shareholders. Public companies are more regulated than private companies and do not tend to be used for start-up ventures.
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Limited Liability Partnerships (LLPs) • Constitution – the rules which govern how the LLP, and therefore its members will carry out its business will usually be set out in an ‘LLP agreement’ (although an LLP agreement is not a legal requirement, it is advisable to have one). • Structure – the LLP does not have directors and shareholders but has members and designated members (who have extra responsibilities in the LLP agreement). • Separate legal entity – an LLP is also capable of holding and owning its own assets and will be liable for its own debts. • Limited liability – if you set up an LLP, the members of an LLP are not personally liable for the debts of the business. If the LLP cannot pay the debt, the liability of the members is limited to the amount which the members have invested into the LLP.
Setting up your business / 2020
If you require further information or help on the issues raised above please contact: Theresa Grech Partner and Head of Corporate (Cardiff): T: 029 2055 7234 E: TheresaGrech@incegd.com We also have a dedicated company secretarial service. If you require help in setting up a company, please contact: Melanie Kincaid Head of Corporate Support Services: T: 029 2167 2683 E: MelanieKincaid@incegd.com
“Theresa Grech is very able and picks up complex issues very quickly.” — Legal 500 UK 2020
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Shareholders’ agreements / 2020
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Shareholders’ agreements / 2020
Do I need a shareholders’ agreement? A shareholders’ agreement is a contract entered into between the company’s shareholders and often the company itself. When starting a company which has more than one shareholder, it is advisable to have a shareholders’ agreement to set out the relationship which a shareholder will have with the other shareholder(s) and with the company. A shareholders’ agreement, along with the Articles of Association, form the constitution of the company. Whilst it is not a legal requirement to have a shareholders’ agreement, we have set out below some of the key benefits of entering into such an agreement: • Certainty and stability – generally speaking, in the absence of a specific provision in the Articles, a shareholder is free to transfer their shares. Therefore there is a risk that a shareholder may decide to transfer their shares to party who is not known to the other shareholders or, they may even decide to transfer their shares to a competitor. This can introduce uncertainty into the operation of the business and impede the smooth running of the company. Therefore, to protect the position, clauses are often included to ensure that if a shareholder wishes to transfer their shares, then they must first offer the shares to the remaining shareholders of the company. If the other shareholders do not wish to buy the shares and they are happy for the shares to be transferred to a third party, then the shareholders’ agreement can provide that any new shareholder must abide by the terms of the existing shareholders’ agreement by entering into what is known as a ‘deed of adherence’. • Restrictive covenants – a shareholders’ agreement can impose restrictions on shareholders to the effect that a shareholder will not, whilst they are a shareholder of the company, or for a certain period of time after they cease to be a shareholder of the company, carry on any business which competes with the business of the company or entice away customers or employees from the company. Generally speaking, these restrictions can be stricter than the clauses which can be inserted into an employment contract, so they can prove very useful to a company should the shareholders fall out and a leaving employee shareholder decide to set up in competition to the business of the company.
shareholders do not use or pass confidential information to any competitors of the business. These confidentiality restrictions can apply during the agreement and after its termination. Protection for shareholders: • Minority shareholders – a shareholders’ agreement can provide protection for minority shareholders by ensuring that some key decisions require the unanimous consent of all shareholders, and not just the requisite majority or 75% of the vote (as required by the Articles of Association and/or the Companies Act 2006). In essence, this will provide that the minority shareholders will have a right of veto over some key decisions. A shareholders’ agreement can also include a ‘tag along’ clause which means that in the event a majority shareholder decides to sell his shares, such a clause would allow the minority shareholders (owning less than 50% of the share capital) the opportunity to participate in the sale at the same time and price (i.e. they can ‘tag along’). • Majority shareholders – a majority shareholder may want to include a ‘drag along’ clause in a shareholders’ agreement. This means that where a majority shareholder receives an offer from a third party to purchase the entire issued share capital of the company, minority shareholders can in effect be ‘dragged along’ and forced to accept the third party offer and sell their shares on the same terms as the majority shareholder. Please note that it is possible to include the ‘drag along’ and ‘tag along’ clauses in a tailored set of Articles of Association. • Disputes – sometimes during the operation of the business, the shareholders and/or directors may find that they disagree about certain matters relating to the company. Disputes can be time consuming and expensive. Therefore, a shareholders’ agreement can be useful in managing such disputes should they arise; by setting out various provisions to deal with such disputes. If you require further information or help on the issues raised above please contact: Theresa Grech Partner and Head of Corporate (Cardiff): T: 029 2055 7234
• Confidentiality – a confidentiality clause can be inserted into a shareholders’ agreement to ensure that
E: TheresaGrech@incegd.com
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Terms & Conditions of business / 2020
03 - Terms and conditions of business &Â Ince incegd.com Europe & Middle East & Asia
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Terms & Conditions of Business / 2020
Do I need terms and conditions of business? Most businesses use standard terms of business to govern the supply of goods and services. Generally speaking, the objectives of a standard set of terms and conditions of business are: • To ensure that you have a binding legally enforceable contract with customers; • To define the obligations of the parties and the consequences of non-performance of these obligations; • To exclude and/or modify the default rules applied by general law which are inappropriate to the particular business; • To allocate risks between the parties, and; • To minimise the scope for any disputes and provide a process which would apply in the event of any dispute. As standard terms of business are not negotiated, they will usually be more favourable to the party for whom they have been prepared. They should not however be too one-sided for commercial and legal reasons. A completely one-sided set of terms may mean that a customer or supplier is reluctant to enter into trade with your business. Also, if a dispute did arise, the fact that the terms are completely one-sided may be taken into consideration by a court in deciding the reasonableness or fairness of a term. Drafting the terms A set of terms will have to govern a number of contracts with different parties so it is wise to ensure that a solicitor draws up the terms for the business: • If you ‘crib’ from other trader’s terms and conditions, you cannot be sure that they are legally compliant or have been drafted with your business in mind;
• Where a business deals with both consumers and nonconsumers, it may want separate sets of terms in order to accommodate the different laws which will apply – the laws which apply to consumers and businesses are different and should be tailored accordingly; • A solicitor will be able to advise you as to how to incorporate these terms into your business relationships – you will need to put procedures in place to ensure that the terms form part of the contract with your customers and that they take precedence over any terms which they may introduce, and; • A solicitor can help you ensure that your terms do not contravene any implied law as to ‘unfair’ contract terms. Including unfair contract terms could result in your terms being unenforceable. If you require further information or help on the issues raised above please contact: Theresa Grech Partner and Head of Corporate (Cardiff): T: 029 2055 7234 E: TheresaGrech@incegd.com
“A balanced and diverse team which displays a depth of professionalism.” — Legal 500 UK 2020
• Where a business supplies different types of goods and services, it may need two or more different sets of terms of business e.g. a business which provides both the sale and hire of plant and machinery will want to provide for two sets of terms – one for sale and one for hire;
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Intellectual Property considerations / 2020
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Intellectual Property considerations / 2020
Intellectual property considerations for start-ups Intellectual property
Patents
Intellectual Property (IP) consists of a series of legal rights – it is a valuable commodity for its owner. Like other items of property, it can be exploited in a number of ways, for example, by way of an assignment in return for a one-off payment, or by the owner permitting others to exploit the property by granting a licence in return for royalty payments. Therefore, it is important to ensure that the intellectual property rights of a business are protected from the outset:
Patents protect ‘inventions’. For registration, the invention must be new, involve an inventive step and be capable of industrial application. You will need to apply to the UK Intellectual Property Office (IPO) to gain protection in the UK. If granted, the patent will last for 20 years however, certain ideas cannot be patented. It is vital patent applications are made as soon as possible. If they are in the public domain, before the application is filed, the inventor will be unable to gain patent protection.
Trade marks
Copyright
The words ‘trade marks’ and ‘brands’ are used interchangeably, and refer to a sign which distinguishes goods or services of one trader from those of another trader. The sign could be a word or phrase, logo, picture, shape, jingle or smell. The main function of a trade mark is to enable customers to recognise the goods or services as originating from a particular trader.
Copyright protects works such as written and artistic works, musical compositions, films recordings and computer programs. The rights attached to copyright arise automatically on creation of the work and allows you to protect your material and stop others from reproducing it without your permission. The period of protection will vary depending on the nature of the work but most often it is the life of the author plus 70 years from the end of the calendar year of his death.
Registration of a trade mark gives you an exclusive right to use that mark; if someone did want to use your mark they would need to get your consent. If a dispute arises over your mark and it is not registered, then you would have to rely on a claim for ‘passing off’ which can prove more complex and costly.
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Intellectual Property considerations / 2020
Moral rights These are rights which arise automatically and are granted to the authors of copyright works and are concerned primarily with the protection of the artists’ reputation. Design rights There are two types of protection in law: • Registered design rights – this gives you a legally enforceable right to use your design. Design registration protects the appearance or look of a product providing it is new and has individual character. • Unregistered design rights – this is an automatic right which gives protection similar to copyright to purely functional designs. Confidentiality Any product which a company develops should be kept confidential prior to any disclosure. All confidential documents should be marked confidential to ensure that all parties are aware of their confidential nature. The disclosure of confidential information should be protected with an NDA or confidentiality agreement. For further tips on how to protect confidential information (see information sheet – “Practical tips for confidentiality agreements and NDAs”). Documents The development of any product should be documented and should be kept safe. All documents should be dated to record when the product was developed.
Therefore, an employment contract should always make it clear that intellectual property created by an employee - whether inside or outside theit duties - belongs to the employer. Even where clauses are included in an employment contract this can be a grey area of law and is not a guarantee of ownership. For example, inventions which are created outside working hours may not vest not in the employer. Employment contracts should also contain a waiver of an employee’s moral rights. In some cases, an employee may be entitled to a statutory right of compensation if the invention is of ‘outstanding benefit’ to the employer. The employer cannot contract out of this right, but it is a rare for a court to award payment on this basis. • Consultants – the use of outside consultants should be looked at carefully. Generally speaking, a consultant will own the intellectual property rights in the works which it creates for a business – this is the case irrespective of whether you have paid the consultant for the work. An express provision governing ownership and use of those rights to be created by the consultant should be included in any contract with the consultant before any work is created. If you require further information or help on the issues raised above please contact: Theresa Grech Partner and Head of Corporate (Cardiff): T: 029 2055 7234 E: TheresaGrech@incegd.com
Employees and consultants All relevant employees and contractors should have intellectual property and confidentiality clauses in their respective employment contracts or contract for services. • Employees – although generally speaking intellectual property created by an employee is owned by the employer, if intellectual property is created by an employee outside the course of their employment, the employer may not have rights to it.
“Very organised and efficient, giving their clients good service.” — Chambers and Partners UK 2020
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05 - Confidentiality Agreements / NDAs & Ince incegd.com Europe & Middle East & Asia
Confidentiality Agreement & NDA’s / 2020
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Confidentiality Agreement & NDA’s / 2020
Practical tips for confidentiality agreements / NDAs A transaction in which a party is proposing to enter with another party may require a confidentiality obligation. There are a number of ways a contract may set out confidentiality obligations: • The parties may decide to enter into a standalone confidentiality agreement (also known as a nondisclosure agreement or NDA), or they may decide to insert confidentiality provisions into a larger document, such as a collaboration agreement for a particular project, and; • If the parties are at the early stages of working on a project together, they might set out the confidentiality terms in a Heads of Terms or Memorandum of Understanding. It is always advisable to sign up to confidentiality restrictions before disclosing confidential information to a party. However, there are a number of practical ways in which a business may also protect its information. Limiting disclosure In practice, the best way to protect confidentiality is to keep information secure, rather than seeking to sue under a confidentiality agreement after the event. So wherever possible, seek to keep disclosure of confidential information to a minimum. For large transactions, where a vast amount of confidential information will be disclosed to a recipient, it is common to have a ‘data room’. An electronic data room is an effective way of protecting the confidential information as access to the data room will be restricted. It is also easy to monitor who has logged on to view the confidential information.
Security controls (e.g. encryption and passwords) If a disclosing party labels a document ‘confidential’, this may not be enough to deter individuals within an organisation from accessing such information. There are additional ways to protect documents which will minimise the potential for any accidental disclosure; either by creating a file with a password or encrypting the files themselves. Hard copies For extremely sensitive information, it may be appropriate for a disclosing party to distribute just hard copies of the document (rather than electronic) and only disclose to specific named recipients. Labelling Any documents containing confidential information, or emails of confidential information, should be clearly marked as ‘confidential’. Training and awareness It is important at the outset to instruct all individuals who will be receiving and handling the confidential information as to the methods to be used for keeping it confidential in accordance with the terms of any NDA. If you require further information or help with drafting a confidentiality agreement please contact: Theresa Grech Partner and Head of Corporate (Cardiff): T: 029 2055 7234 E: TheresaGrech@incegd.com
Recording disclosure A disclosing party should always keep a record of what confidential information it has passed on to the recipient and the date of the disclosure. This will allow it to keep track of what information or documents to ask the recipient to return or destroy and to help identify the source of any potential leaks.
“Extremely flexible and efficient.” — Legal 500 UK 2020
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06 - Employment law essentials &Â Ince incegd.com Europe & Middle East & Asia
Employment Law Essentials / 2020
Ince
Employment law essentials / 2020
Employment law essentials for start-ups This guide provides an overview of the main employment issues for start-ups. Register as an employer You will need to register with HM Revenue and Customs (HMRC) up to four weeks before you pay your new staff. This process can take up to two weeks, and you cannot register more than two months before you start paying your new employees. It is important to note that you must register yourself as an employer even if you are only ‘employing yourself’ e.g. as the sole director of your business. If you are employing workers who earn £112 a week (or less than £486 a month or £5,824 a year) you are exempt from registering with HMRC. However, if workers receive a pay rise, have an existing pension, are employed elsewhere, or start to receive expenses - then you will need to register as an employer. Contract of employment Employees are entitled to receive a written statement of the main terms of their employment; such as a job title, place of work, main duties, pay (plus any bonuses) working hours, holiday entitlement and notice period. Since April 2020, the written statement must be provided on or before the employee’s first day of work. It is crucial to put all important terms in writing (not just those that are required by law) to ensure that both parties have a clear understanding of what is expected of them. For example, whilst an employee has an implied duty to keep any business information or trade secrets confidential whilst they are employed, when the employment ceases, there is only a very limited implied right for the information to be kept confidential. Therefore, it is very important that your contracts include confidentiality provisions in order to protect your business. To protect your business even further, you could consider including post-termination restrictive covenants. These covenants can be used to protect your client-base and other employees for a specified period of time after an employee leaves your company. It is important that you obtain legal
advice on the drafting of any covenant, as they can only be just wide enough to protect your legitimate business interests. If the restrictions are too wide, they will not be enforceable. You should also consider the inclusion of terms concerning the ownership of intellectual property (IP). Even though generally speaking, any IP created by any employee during their employment remains the property of the employer, if your employee’s role is likely to involve a creation of substantial IP rights, a detailed IP clause should be included in the contract. Senior employees or directors should also be provided with a comprehensive document known as a service agreement, which is essentially a very detailed employment contract. We can help you determine which type of employment contract is best suited for your business needs and what has to be addressed in the contract, depending on the kind of role for which you are recruiting. The essential employment policies It is important to have policies which set out procedures on how you manage your employees. This will ensure that employees are treated in the same way, and you and your employees know what is expected of them. Any policy you put in place should state that it is not contractual to protect you from being exposed to a breach of contract claim should you not comply with the policy in any way. • Disciplinary and Grievance Policy - the written statement of terms, discussed above, must notify your employees of any disciplinary rules applicable in the workplace. It is advisable for an employer to put in place a disciplinary procedure that complies with the provision of the ACAS Code of Practice on Disciplinary and Grievance Procedures. • Equal Opportunities - an effective Equal Opportunities Policy should discourage discriminatory attitudes and make staff feel confident about equality of opportunity. The policy can also reduce the risk of legal actions. Again, it is important that the policy is publicised to the employees and appropriate training is given.
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Employment Law Essentials / 2020
• A Social Media Policy - employees should be informed that bullying online is not acceptable and that should this kind of behaviour be reported, it will be investigated and properly acted upon. It should also be made clear that this policy extends to your employees’ private social media accounts. Because the Social Media Policy will inform your employees of what kind of behaviour is expected of them and warn them of the repercussions of not abiding by it (by referring to the Disciplinary and Grievance Policy), this will further protect your business’ reputation. You will also be able to use this policy to communicate to your employees what business information they can or cannot share with the public. • General Data Protection Regulation Policy (GDPR Policy) - the GDPR requires businesses to inform employees about: •
Who the data controller is and the purpose of the processing of their personal data;
Businesses are assessed by data protection agencies from their own countries. Even though the audits may vary in each country, the standardisation of the regulation means that businesses that are GDPR compliant are free to operate and employ people throughout all EU countries without being required to comply with each nations’ individual data protection regime. It is important to implement a GDPR policy to minimise the risk of data breaches by your staff, which will have a bad impact on the reputation of your business. Further, if a data protection agency finds your organisation is not compliant with the GDPR, they may impose a fine in the sum of 4% of your global annual turnover or €20 million, whichever is higher. We can draft policies that are tailored to your business ensuring that they are in line with the employment legislation. If you require further information or help with drafting a confidentiality agreement please contact: David Baynton
•
•
Any third parties who receive their data, for instance payroll providers, and;
Partner and Head of Employment (Bristol):
Their rights under the GDPR, for example the right to object or lodge a complaint.
E: DavidBaynton@incemetcalfes.com
Please note that this is not a comprehensive list of your duties as an employer under the GDPR. Further, it is important to train your employees about the GDPR, so not only will they understand their rights and what happens to their data, but also they will understand how they must handle the data of your customers.
T: 0117 945 3069
“The team is conscious of the client’s needs and ways of working as opposed to delivering a ‘one size fits all’ approach.” — Legal 500 UK 2020
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New Business Leases / 2020
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New business leases / 2020
What do you need to look for in a new business lease? Any start-up business taking on a lease of business premises will find it a difficult process without proper legal advice. The lease is a contract that governs the rights and obligations of both the landlord and the tenant during its term. The landlord’s solicitor traditionally prepares the draft lease which can run to many pages and can include numerous traps for the unwary tenant. Apart from looking for the right location and amount of space, there are some important considerations that you should consider. This guide highlights some of the key issues: Heads of terms If the landlord has employed an agent, often a surveyor, they will usually prepare the heads of terms. They should be clear and free of jargon. They set out the main terms that have been agreed between the parties and should include as a minimum; the extent of the property and the length of the term, the scope of the main tenant’s covenants (such as repair, alienation and alterations) and the financial terms (rent, insurance, service charge, any rent free period and the rent review and pattern). Costs As well as agreeing the solicitor’s charges at the outset, a new tenant will want to know the costs of entering into the lease: • Any lease of more than seven years must be registered at the Land Registry who charge a fee based on the annual rent or premium; • Stamp Duty Land Tax (or Land Transaction Tax in Wales) may need to be paid depending on the level of rent and the length of the term; • The annual rent in a business lease will need to be clear along with any premium payable on commencement of the lease. The rent will usually be payable in advance on certain dates (monthly or quarterly for example) and VAT may also be charged; • Rent reviews need to be considered. These may be set dates during the term. Should the rent increase to a pre-agreed amount or will it be reviewed to the ‘open market rent’, or increase in line with an index such as the RPI or CPI, the rent increase could even be linked to the increase in the business profits (‘turnover rent’), and; • What are the costs of the ‘outgoings’ such as rates, insurance premiums and utility bills?
Is there a service charge? This is common where the lease is of a part of the building and the landlord pays the outgoings for the common or retained parts and then bills the tenant for the tenant’s share. The tenant’s share could be calculated to a fixed percentage according the square footage that it occupies in the building or, it could be determined by the landlord who will want to pass on the total cost of running the property to its tenants. Is the tenant responsible for insuring the premises or is the landlord to obtain the policy and the tenant pay a proportion or, the whole of the policy? The policy terms will need to be checked carefully to ensure that the tenant is not in breach and that the level of cover is appropriate for the property. The tenant’s obligations Every tenant will be concerned to understand their rights under the lease and to ensure that they are sufficient for their purpose. A tenant must also consider their obligations, remembering that a breach of any of them could result in the landlord exercising its right to forfeit the lease. In other words, to terminate it: • Will the term of the lease include break clauses for either the tenant or the landlord? A break clause is a right to terminate the lease before the end of the term and is particularly helpful for a new business. It will probably be subject to specified conditions that must be achievable and a minimum period of notice; • The description of the area being let to the tenant is known as the “demise” and is very important. The tenant is only responsible for what is being demised and will not have rights over the landlord’s property outside of the demise unless those rights are given in the lease; • What are the tenant’s repairing and decorating obligations? Some leases will require the tenant to put the property into a good state of repair, even if it was not in a good state of repair at the date of the grant of the lease. If the property is in less than perfect condition, then a tenant should aim to agree that its repairing and decorating obligations will be judged against a photographic schedule of condition, which would not oblige the tenant to put the property in to any better state of repair or condition than that described in the schedule, and;
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New business leases / 2020
• Apart from the break clause, are there other ways for a struggling business to vacate the premises and end the lease? Will the tenant have the right to assign the lease and/or to sublet the property?
If you require further information or help, please contact:
• Is the proposed business use an authorised planning use and allowed under the lease?
T: 029 2055 7231
• Does the tenant need to make alterations or improvements at the start of the lease or during the term? • Will the tenant have sufficient rights to erect signage so that it can announce its presence?
Paul Simon Commercial Property, Partner (Cardiff): E: PaulSimon@incegd.com
“Very commercial and will go the extra mile.” — Legal 500 UK 2020
These are just a few of the areas that should be carefully considered before a business enters into a lease. We are able to offer advice and assistance from the start of the process to the finish and throughout the term of the lease. We can help ensure that both the business and landlord are complying with their obligations and can advise on the processes a business needs to follow if there is a problem.
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08 - Immigration issues &Â Ince incegd.com Europe & Middle East & Asia
Immigration issues / 2020
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Immigration issues / 2020
Immigration issues It is an exciting time to start a business in the UK, but this comes with its challenges, which can be more complex if you are a foreign national seeking to gain residency in this country via the establishment of your business. Despite the recent efforts by the UK Government to reduce migration to the country, they do however, continue to encourage investors and entrepreneurs with particular skills and attributes to establish their business ideas in the United Kingdom. Innovator Visas, Start-Up Visas and Sole Representative Visas. The UK Immigration Rules cater for potential business persons by offering three business related visa routes: • Innovator Visas; • Start-Up Visas; and • Sole Representative Visas. These visas allow the aspiring foreign entrepreneur the opportunity to apply for residency based on their intention to establish their business in the UK. In all cases, the business idea should be viable; demonstrated through a professionally drawn up business plan. The business plan should set out: the intended business idea, how it will develop, markets, financing available, potential employment opportunities for the resident labour market, competition and the qualifications and business attributes of the potential investor and visa applicant. Before proceeding to the visa application stage, the business idea has to be endorsed by a nominated body who will make a recommendation to the Home Office. The endorsing body will then review the case based on the points above. This reinforces the requirement for a professionally written and argued business plan.
UK must continue to operate, however, the company can position a foreign employee from the parent company in the UK. Alternatively, it can place a minority shareholder in the firm to run the subsidiary as the sole representative. Permissible business activity is limited to the running of the branch subsidiary, and permanent residency in the UK can be gained after five years. Endorsement is not required for such activity, rather, it is assessed based on a credible need for the business arrangement. Global Talent Visas The UK Government has recently introduced the Global Talent visa; a new immigration category to encourage “the brightest and the best” to bring their business to the UK. This category, similar to the Innovator and Start-Up categories, is designed to allow talented individuals to remain in the United Kingdom or to apply to move to the UK via an immigration process - ultimately leading to permanent residency. This route replaces the previous Exceptional Talent visa, with two principal changes: (1) the cap on the number of applications via this route has been removed; and (2) the definition of “talented individuals” has been extended, therefore allowing individuals from other professions to apply. The new Global Talent visa also allows those who have shown promise and potential in specific industries, enabling UK graduates to seek opportunities as global talents. The two-stage process involves the following (1) the applicant applies for endorsement to the relevant body where their skills, abilities and achievements are assessed; and (2) once the applicant has been endorsed, they can then apply to obtain their visa. What professions are eligible for a Global Talent visa?
Once the business idea is endorsed, the business person can make a visa application under either the Start-Up or Innovator immigration categories; both of which lead to permanent residency after a five-year period. In cases when the business has flourished and developed quickly, permanent residency can be fast-tracked and attained after three years. Overseas companies are also encouraged by UK Immigration to open branch subsidiaries in the United Kingdom, if the firm has no representation in this country and there is a clear business requirement for the company to open a branch in the UK. The overseas main enterprise based outside of the
• Dance, music, theatre, visual Arts, literature, combined arts, fashion design, architecture, TV, animation, post production, visual effects • Cyberspace engineers, data scientists, data engineers, hardware engineers, mobile app developers, digital business, virtual and augmented reality developers • Aerospace, radar systems, satellite systems • Chemical and process • Civil engineering, construction • Electrical and electronic
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• Mathematics, computer science • Digital technology applicants can be fast-tracked Who are the endorsing bodies for the Global Talent visa? • The Arts Council of England • Producers Alliance for Cinema & Television • British Fashion Council, Royal Institute for British Architects
and submit itself to a number of compliance tests. Specifically, the company has to demonstrate that they are: maintaining required records, legitimately trading, properly registered for tax and VAT, and they are mindful of their UK immigration obligations relating to the employment of resident and foreign nationals. Once the Sponsor Licence is granted, this permits the company to fill vacancies and sponsor relevantly qualified foreign nationals via the Tier 2 work permit scheme.
• Tech Nation
If you require further information or help, please contact:
• The British Academy
Alan Platt
• Royal Academy of Engineering
Immigration Director
• The Royal Society
T: +44 (0) 20 7759 1387
• UK Research & Innovation Sponsor Licence British citizens or those already settled with indefinite leave to remain in the United Kingdom do not have to go through the same immigration process to establish a business in this country. Nevertheless, they have to be mindful, if they are to recruit non-UK nationals to work in their enterprise, they will require a Sponsor Licence issued by the Home Office. To obtain the Sponsor Licence, the company will have to apply
E: AlanPlatt@incegd.com
“I endeavour to simplify the complex and provide a clear route to resolving a client’s UK immigration problem.” — Alan Platt
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Disclaimer Notice: Information contained in this Starter Pack is for information purposes only. It is not and should not be taken to be legal advice. You should not take action or omit to take action based on this Starter Pack. The legal professionals at Ince would be happy to discuss your legal issues with you. You must not copy the Starter Pack. No responsibility can be accepted by Ince Gordon Dadds LLP for any loss from acting or refraining from acting as a result of any material in this publication. Office Information: Ince Gordon Dadds LLP and its affiliated entities practice law internationally as ‘Ince’ (the “affiliates”). References in this brochure and elsewhere to Ince means Ince Gordon Dadds LLP, its subsidiaries, the affiliates, and the other partnerships and other entities or practices authorised to use the name ‘Ince’ or describe themselves as being in association with Ince as the context may require.
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