Company and commercial

Most businesses will need to borrow more money at some point.  Banks supply standard documents for this purpose and we are experienced in dealing with most forms of bank lending.

The owners of a business may wish to inject loan capital rather than equity.  In these cases the owners should consider taking security for the monies lent.

We also have experience in acting for private lenders who wish to lend to a business for a specific project or more generally.  In these cases, it is necessary to understand the extent to which the funding can be “ring fenced” from other lending and what security is to be provided.  In the case of equity funding, you may wish to invest in a company as a shareholder but on the basis that your investment is kept separate from the founder shareholders.  The methods of achieving this can be complicated.  We can help you through these processes and are experienced in liaising with accountants, tax advisers and the other professionals involved in such transactions.

If you intend to be in business with someone else you should regulate the way in which the business is managed and consider:

• how are decisions about the business or its management to be made
• what happens if a business partner dies or becomes unable to work
• what terms will apply if you or your partner wish to leave the business
• how will you resolve disputes
• will the partners be required to devote all their working time to the business
• can you or your partners have an interest in any other business
• how are profits and losses to be shared
• how is the business to be financed
• in what way will the dynamics of any existing relationship be changed if you take on a new partner

Increasingly businesses are looking to improve their service or cut costs by outsourcing or conducting all or part of their business through a joint venture.  Properly managed, these relationships can work well and be profitable.  However, care must be taken to ensure that the arrangements are explicit in who does what, how costs and profits are managed, how the arrangement is to be financed and how the relationship between the parties is managed.

These agreements can often require employees from both parties to be involved in the outsourcing or joint venture arrangement or for the technology or data of one party to be available to the other.  All these matters must be clearly documented to ensure that each of the parties knows what is expected and when the objective has been achieved, how the arrangement can be unwound without one party being advantaged over the other.

If you want to incorporate your business or create a group company structure we can assist with all the legal aspects including:

• Advising on share exchanges and allotments
• Tax clearances
• Appropriate board minutes
• Company resolutions
• Transfers of assets

If you are re-arranging financing we can advise on the implications of lenders’ terms and conditions.

The new Bribery Act came into force on the 21st July 2011, read more about the Bribery Act to understand its impact on your business.

Terms of business drafted specifically for your firm can deal with how the contract with a customer or supplier is brought into existence and a range of other issues including terms of payment, limitations and exclusions of liability, retention of title and the extent to which you guarantee any product.

The terms must be properly incorporated into the contract if they are to be effective – if they are not they will have no bearing on the contractual relationship between you and your customer or supplier.

James Stephenson has extensive knowledge of who to best draft terms that will be beneficial for your business.

Contact James today on js@winstonsolicitors.co.uk or call 0113 320 5000 to obtain advice today.

We have considerable experience in advising different kinds of businesses on all types of contracts including:

• Terms and conditions of trading
• Franchising
• Distribution and agency agreements
• Contracts relating to patents, trademarks and other intellectual property
• Confidentiality
• IT Contracts such as: website development, software licensing, and terms and conditions of websites

For help with commercial contracts call 0113 320 5000

Introduction

The Bribery Act 2010, which came into force on 1st July 2011, heralded a significant change to UK bribery law. Despite this, many local businesses remain unaware of the implications of the legislation, or even its existence.

The Act is aimed at preventing business profiting from bribery or ‘backhanders’. It is of particular importance to businesses, since a commercial organisation may now be criminally liable for failing to prevent bribery which is committed on its behalf.

General offences

Under the Act, it remains an offence to offer, promise or give a bribe, or to request, agree to receive or accept a bribe. The offences at sections 1 and 2 are punishable by up to 10 years in prison.

Businesses

Two further offences in the Act are specifically aimed at preventing commercial bribery. Section 6 creates a discreet offence of bribing a foreign public official, designed to prevent the influence of decision-making in publicly funded business opportunities.

Under section 7, a firm may now be guilty of an offence, punishable by an unlimited fine, if it fails to prevent bribery committed on its behalf. The person giving the bribe does not have to be an employee. The scope extends to anyone capable of committing bribery on the firm’s behalf, including agents and contractors, but it must intend to secure an advantage for the organisation.

Organisations with overseas and public contracts should take extra care, particularly in countries where bribery or corruption is commonplace. There is no requirement that the person committing bribery on the firm’s behalf has a connection with the UK and local custom will be largely ignored.

Common law

The new offence does not affect the principle that an organisation may be directly liable for an offence under section 1 or 2 where bribery was committed by someone who was the ‘directing mind’ of the organisation, such as a partner or director.

Personal liability

Under section 14, ‘senior officers’ in an organisation (partners, directors etc.) may find themselves with a criminal record if they are complicit in an offence committed by the firm.

Corporate hospitality

The government recognises that hospitality and promotional expenditure is an important part of business. The Act is not intended to prevent firms getting to know their clients by, for instance, taking them to dinner or sporting events. Thus, reasonable, proportionate hospitality will be largely unaffected.

Defence

The legislation is not aimed at penalising generally well-run firms for isolated incidents. So, a full defence is available where an organisation can show that it had adequate procedures in place.  For instance, a firm might consider the following:

• Conducting a bribery risk assessment;
• Issuing a policy statement committing it to reasonable, transparent hospitality;
• Staff training, including guidance on hospitality and promotional expenditure;
• Monitoring and reviewing its procedures and contracts of employment

Conclusion

The law does not require unduly expensive or onerous procedures for legitimate businesses. However, firms should educate staff and adopt measures proportionate to the risks they face.

Reasonable, proportionate hospitality will continue, but recipients should not be given the impression that they are obliged to provide work in return.

The rules about data protection and privacy can be confusing and difficult to follow. Failure to comply with the regulations can be costly, not only financially but in terms of a loss of reputation. You should know how these rules affect your business and have in place policies for your employees regarding the use of computers, electronic media, confidentiality and a number of related issues.

In addition, GDPR will affect website design, the use of the Cloud and other data management issues. You should know how to comply with these rules given the new powers of the Information Commissioner’s Office to impose fines and take other actions which can adversely affect your business.

If you sell your goods or services and allow the buyer time to pay you are taking a risk.  You may be able to limit this risk by:

• the use of terms and conditions which include a retention of title clause which may enable you to recover goods not paid for
• getting security from the customer either in the form of a charge over the customer’s property or in the form of a personal guarantee from the owners or directors of the customer.

You may also be able to limit your risk by excluding or limiting liability for the performance of your obligations under the contract with your customer.  Whether or not this can be achieved will depend on the circumstances and the extent to which any limitation or exclusion can be said to be reasonable.

We can help in preparing appropriate documents to help limit the risks to which your business can be exposed by these often avoidable problems.

Every year we see the need for compliance increase, whether it be new employment laws or how the internet and other electronic media can be used (or not used) for business.  This level of administration can be difficult to cope with but unnecessary risks can be created by doing nothing.  We can assist with a number of these issues [and in particular the regulatory compliance obligations around privacy].