Six things for Indian businesses to consider before expanding to the UK

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According to the UK’s Department for International Trade the proposed trade arrangement between India and the UK should be finalised by 2023, ahead of the general elections in both countries the following year. The arrangement said to be ‘worth billions’, will present huge opportunities for Indian businesses and could double trade between the two nations by 2030.

Sneha Nainwal, our head of our India desk, shares why now is the ideal time for Indian businesses to consider expanding to the UK, and what they need to consider before making the move.

1. Have a business plan

Although it is not a legal requirement, having a business plan could help secure additional investment in the future. By rationalising the decision to expand to the UK, and in turn highlighting the opportunities, a business plan presents investors with a clear picture of the potential rewards.

2. Think about your company structure

As Indian and English laws share many similarities, company structures available for new businesses in the UK will be familiar to Indian enterprises.

Private limited company (Ltd)

This is one of the most common corporate structures in the UK. Not only is it a low cost and speedy option (registering a limited company can cost just £12 and take as little as 24 hours), it’s also an attractive option for Indian entities looking to create UK affiliates, as the directors of the company do not have to live in the UK on a permanent basis.

However, limited company structures restrict a business to only seeking private investment to fund growth and development.

Public limited company (PLC)

A public limited company, in tandem with a listing on a stock exchange, may be more suitable businesses planning to expand (or larger, more established companies seeking to tap markets), as this structure allows access to a broader range of investment.

Limited liability partnerships (LLPs)

Other structures, such as limited liability partnerships, have the advantage of not being required to pay corporation tax.

3. Understand the UK’s corporate governance requirements

When expanding to the UK business need to be aware of UK corporate governance, including the form of a company’s articles of association (the rules and constitution governing a business). Certain business decisions must be made in accordance with these articles of association and evidence of some of the decisions will need to be filed publicly at Companies House, the UK registrar of companies. If not, a financial penalty may be issued.

There are two options for businesses looking to expand to the UK:

  • Model articles, which are provided under the Companies Act 2006. These are generally more suited to smaller companies: or

  • Tailored articles of association that are specific to their business. These would better suit larger companies or those with complex structures.

4. Consider the most suitable location

Location is key when it comes to setting up a business.

London and the Southeast are hotbeds for entrepreneurs, particularly those in the finance and fintech sector, with almost one third of start-ups in the UK based in the region. The Southeast also has easy access to the main UK airports and transport links, making it an attractive option for globally linked service industries, such as banking, finance, and legal services

However, property in the Southeast, and particularly London, can be very expensive. Therefore, businesses should carefully consider whether having a presence in these locations is essential, especially when setting up.

Although London remains a prestigious destination for global businesses, other UK cities also have plenty to offer.

The Midlands and the North of England have strong connections to the automotive and energy industries, with Birmingham, Manchester, Humberside and the Northeast excelling in sectors such as driverless cars and industrial hydrogen technologies. Businesses involved with new technology hubs in these regions are likely to have a clear advantage when working towards reaching net zero targets in the UK – mainly due to their proximity to a host of potential new partners, collaborators, and customers.

Real estate, warehouse costs (and general living expenses) are much cheaper outside of London and the Southeast. Therefore Indian companies may want to consider basing themselves in the Midlands and Northeast to take advantage of cheaper costs and established sector reputations. There are also good transport links (by rail, road, air and sea), which makes these regions a desirable option.

5. Assess immigration requirements for your workforce

Business owners will need to consider visa types and requirements for any workforce members that will be migrating from India to the UK. There are a range of immigration visas available, including:

  • Innovator

  • Start-up

  • Global Talent; and

  • Tier 1 Entrepreneur visas

Read more about all the options that are available to you and how we can help you navigate the UK immigration system.

6. Open up a UK bank account

Although businesses don’t need to have a UK bank account to conduct business in the UK, it can be more convenient to make and receive payments in the country.

However, setting up a UK bank account can be a time-consuming process, so we advise to start the process of opening one as soon as possible to avoid unnecessary delays.

The UK is an attractive option for Indian businesses

Setting up a company in the UK may seem like a daunting process, but with the right support and resources, it is a relatively straightforward task.

The UK can provide ample opportunities for Indian companies looking to grow and thrive in a new and promising marketplace. By making prudent and well-informed decisions early on, Indian businesses can position themselves to take advantage of the opportunities presented by the India-UK trade partnership.

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Sneha Nainwal is the Head of India Desk at Shakespeare Martineau. Sneha is dual-qualified to practise law in India and England & Wales.

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We appoint a Birmingham specialist corporate finance partner

News | New Joiner

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As part of its ambitious growth strategy, leading law firm Shakespeare Martineau has appointed corporate partner Michael Stace.

With more than 25 years’ qualified experience, Michael joins Shakespeare Martineau from Browne Jacobson, where he was head of the firm’s Birmingham office.

Specialising in corporate finance, Michael advises public and private companies, individuals, and institutions on domestic and international M&A, private equity investments, restructurings, joint ventures, and partnership matters.

Michael, who will be based at Shakespeare Martineau’s Birmingham hub, said: “I am thrilled to have joined such a forward-thinking and ambitious firm at such an exciting time. I have been impressed by the energy and enthusiasm of those within the business, and I am looking forward to helping the Birmingham corporate team build upon and cement its presence and reputation in the local market.

Michael qualified in 1995 while at Cole & Cole – which, subsequently, became Morgan Cole and then Blake Morgan – and became a partner in 2004. He was head of corporate at the firm for four years, as well as an executive board member for three years, before joining Browne Jacobson in 2017.

Recently, Michael has acted for the founders and management in connection with the Westbridge-backed management buyout of Smart Capital Technology, as well as for NorthEdge on its acquisition of the global marketing services and consultancy firm ICP.

He said: “I really enjoy helping key decision-makers deliver on their business strategies and balancing risk and commercial objectives. I am excited to begin working with the Birmingham corporate team to strengthen its community ties and expand the firm’s client base in the West Midlands.

Michael’s appointment is the latest in a string of new partner hires – including corporate partner Jody Webb in Birmingham – as part of Shakespeare Martineau’s growth strategy, broadening its footprint both north and south.

His appointment is not the end of the firm’s corporate team expansion as it continues to talk with various lateral hires and teams.

Victoria Tester, partner and managing director of life and business at Shakespeare Martineau, said: “There is a lot of opportunity in the corporate market across the whole of the Midlands and beyond. With a wealth of experience and a strong local reputation, Michael’s appointment consolidates our commitment to providing clients with top quality consultancy from the very best legal minds that Birmingham has to offer.

Duncan James, partner and head of corporate at Shakespeare Martineau, added: “We are delighted to welcome Michael to the team, which is part of our continuing commitment to having a strong corporate presence across all our major hubs. We are continuing to look at further corporate recruits across our hubs as we continue to look to significant growth.

Shakespeare Martineau is proactively seeking talented people to join the firm on its growth journey, including mergers, team recruitment and lateral hires nationally.

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Director liable for fraudulent trading for not investigating VAT fraud - ignore HMRC at your peril

Blog | Banking & Financial Services

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A recent High Court decision (JD Group Ltd [2022] EWHC 202 (Ch)) has found a director liable for fraudulent trading when he was aware that the company was participating in VAT fraud and deliberately failed to investigate.   This decision has ramifications for directors and companies.

Background to the case

The company started trading in baby clothes, and later in mobile phones. When HMRC assessed its 2005/2006 tax return it declined its claim for tax relief in respect of a series of related import and export transactions, the effect of which was VAT fraud. HMRC suggested that the company undertake various steps to avoid this, such as investigating counterparties.

The liquidator subsequently brought a claim against the director for fraudulent trading (sec. 213 Insolvency Act 1986). The liquidator relied on HMRC’s analysis of the VAT fraud.

The court confirmed that the liquidator had to satisfy a two-stage test. First, to demonstrate the director's subjective state of knowledge; and then to show that the director's conduct was dishonest based on the objective standards of ordinary decent people (Bilta (UK) Ltd (In Liquidation) v Natwest Markets Plc [2020] EWHC 546 (Ch)).

The director argued that he did not know the company was participating in a VAT fraud. He claimed the company had robust pre-transaction due diligence processes and, as a result, he believed the transactions were genuine.

The outcome

The court held that the director's defence was not credible. There was no evidence that due diligence was being carried out, the transactions were back-to-back and often entered into before payment was received. The evidence showed that the transactions were uncommercial.

The court concluded that the director was, therefore, aware that the company was participating in a fraud, and that the director deliberately decided not to carry out due diligence and other steps suggested by HMRC. The director's conduct was dishonest by the objective standards of ordinary decent people and he was, therefore, liable for fraudulent trading.

The court ordered the director to contribute an amount equal to HMRC's claims in the liquidation for unpaid VAT to the company’s assets, plus a misdirection penalty (for misdeclaration in the company's 2005/2006 tax return). This was on the basis that, had the VAT fraud not occurred, the company would not have been liable to HMRC.

Our advice?

Our advice to directors facing a similar situation would be to implement (and never ignore) measures suggested by HMRC to mitigate the risks of companies being implicated in tax fraud, and consequently mitigate a director's risk of finding themselves subject to a similar claim.

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Our corporate team supports company’s interest in inflammatory disease treatment

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Listed UK diagnostics developer Cizzle Biotechnology has acquired a 5% economic interest in treatments for inflammatory pulmonary and cardiovascular disease – with support from Shakespeare Martineau’s Birmingham office.

Cizzle Biotechnology – which was originally a spin-out from the University of York – has entered into a definitive agreement with Conduit Pharmaceuticals Limited and medical charity St George Street Capital Limited in association with the development of AZD 1656 or other similar treatments developed by the two companies.

In a clinical trial, data showed there was a significant increase in the migration of the regulatory T cells – which potentially reduce serious cardiovascular and lung diseases that are causative in the development of lung cancer, which Cizzle is developing a diagnostic test to identify – from the patients who had taken the drugs compared to those who had not.

Keith Spedding, corporate partner at full service law firm Shakespeare Martineau, who led the deal, said: “The biotech industry is absolutely fascinating – we are seeing huge movements and rapid growth in this market as clinical need increases and technology and innovation races to keep up.

“It has been great to get this deal over the line, which will allow Cizzle to develop treatments and continue developing its blood test for the early detection of lung cancer.”

The agreement is in addition to Cizzle’s existing interest in AZD 1656, which was announced on 20 September 2021. It supports the company’s ambitions to expand its target customer base into the pharmaceutical industry and is in line with its strategy of building a portfolio of early cancer detection tests, companion diagnostics and royalty bearing stakes in significant drug assets.

Executive chairman Allan Syms said: “The agreement represents an important extension to our close relationship with Conduit Pharmaceuticals Limited and St George Street Capital Limited.

“On 20 September 2021, we announced we had acquired a stake in St George Street Capital Limited’s AZD 1656 asset and we are now pleased to have the opportunity to increase our stake by an additional 5%.

“This new agreement supports our ambitions and is in line with our growth strategy. Keith and his team were able to react quickly to get this deal over the line.”

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Keith advises companies (both public and private), partnerships and their owners on all aspects of corporate and partnership law.

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Hayward Tyler Fluid Handling acquires Transkem Plant

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Shakespeare Martineau’s Birmingham office has supported Hayward Tyler Fluid Handling (HTFH) – part of Avingtrans’ process solutions and rotating equipment division – with its acquisition of Transkem Plant Limited, which manufactures mixers and agitators for blue chip companies.

The deal will see Transkem’s operations move 14 miles south from Hillington, near Glasgow, to HTFH’s site in East Kilbride. The firm’s managing director Stuart Gibson will head up the new combined operation under the HTFH brand.

Full service law firm Shakespeare Martineau acted on behalf of HTFH, including through its Scottish property expert Amal Kaur.

Corporate partner Keith Spedding, who led the deal, said: “It has been a pleasure to once again support our long-standing client Avingtrans, this time via its process solutions and rotating equipment division. For more than a decade, we’ve seen the firm implement and progress its strategy and we’ve been able to support this with our international, corporate and MedTech expertise.

The acquisition brings together two respected names in the processing industries – helping to expand their offering for new and existing customers across the globe.

HTFH designs, manufactures and services performance-critical electric motors and pumps to meet the most demanding of applications for the global energy and chemical industries.

Austen Adams, managing director of Avingtrans’ process solutions and rotating equipment division, said: “Transkem is well-known for designing and manufacturing specialist mixers for the pharmaceutical, petrochemical, food and beverage industries.

This fits neatly with HTFH’s expertise producing pumps and valves, as well as our in-house mixer testing capabilities. By consolidating the two businesses, we can expand our offer for new and existing customers around the world, becoming a more rounded fluid handling provider and creating a strong foundation for future growth.

Jennie Davis and the Shakespeare Martineau team did another excellent job.

Transkem, which was founded in 1934, is a founding member of the Fluid Mixing Process Group at Cranfield University – playing a key role in the development of the fluid mixing design guide, which remains the basis of mechanical mixer designs to this day.

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What does the OfS consultation on its new strategy tell us about regulation in the years ahead?

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OfS consultation

The OfS has published a consultation on its new strategy for the period 2022 – 2025, which closes at noon on 6 January 2022.  The new strategy highlights a range of specific issues which institutions will need to be ready to address over that period.  

It’s all about the base(line)

The consultation confirms that the OFS sees its regulatory expectations (defined as both the conditions of registrations and “softer” tools such as statements of expectations) as the minimum performance that students and taxpayers are entitled to see. 

Therefore, its focus is on, and will remain on, providers who fail to meet these baseline expectations. Up until now that has principally meant focussing on the baseline as part of the registration process, where the judgments were made at provider level, but now the focus will shift to the ongoing compliance of registered providers. This could result in quite granular enforcement; for example, the strategy anticipates that individual courses that do not meet the quality and standards baselines will be “improved or closed”. This extends significantly the number of providers who are potentially “in scope” for action of this type and raises questions about how such action could affect the rights of students already on or recruited to the courses in question. More generally, institutions themselves will need to ensure that their processes for identifying and addressing instances of non-compliance at course or department level are robust and speedy. 

On the plus side, providers operating above the baseline are told they can expect to see a reduction in bureaucracy and regulatory burden. How this welcome assurance will be operationalised by the OfS remains to be seen, given the increasingly granular nature of its proposed enforcement.  Performance beyond the baseline will be encouraged through influence and incentives, including use of the OfS funding powers, rather than regulatory activity.  

Even more welcome is the OFS’s commitment to looking at a regulatory “sandbox” approach to support innovation, as we called for in this September 2021 blog OfS consultation: Regulating quality and standards – how far is too far? - (shma.co.uk), although this is likely to be small in scale.  

Quality matters

The new strategy identifies two focus areas, the first of which is quality and standards. We are still awaiting the outcome of the consultation into the suite of new registration conditions dealing with this area. The new strategy tells us that these will be robustly enforced, and will be underpinned with a new registration condition on student outcomes, and by the implementation of the next iteration of TEF.  

Free speech, inevitably, gets a mention, and the intention is that the OfS will respond to individual cases and take enforcement action where providers have failed to take positive steps to secure free speech, including where this has resulted in the inhibition of minority, unpopular and controversial opinions. 

Action will be taken under the OfS’s existing powers and will increase once the new powers under the Higher Education (Freedom of Speech) Bill comes into force. This does rather raise the question of why, if the problem is as severe as it is stated to be, the OfS has not yet used any of its existing powers.  

Equality of opportunity

In addition to a continued focus on access and participation, the OfS intends to stimulate more flexible and innovative provision so that prospective students have a diverse range of opportunities throughout their lives. The new strategy recognises that the regulatory approach may have to adapt to fit the new lifelong loan entitlement, whenever details of that are finally published.  

The OfS intends to consider further what action would be effective in regulating the way providers deal with cases of harassment and sexual misconduct. This will include qualitative and quantitative research on the scale of the problem, an analysis of what providers are doing in response to the OfS statement of expectations in this area and the development of an approach that will drive culture change, through the sharing of best practice and targeted enforcement activity. (It is a pity that a similar approach is not being proposed to deal with the perceived free speech issues on university campuses.) 

Further work will be done on the consumer protection and student protection registration conditions as well as the effectiveness of management and governance.  

What’s the carrot?

The carrot dangled in front of providers is the promise of risk-based regulation and an expectation that by the end of the strategic period, the OfS will have varied regulatory requirements for individual providers based on risk. However, rather disappointingly, this appears to involve increasing requirements on high risk providers, rather than reducing them for lower risk ones.  

Conclusion

The proposed new strategy is more evolution than revolution, but institutions should nonetheless brace themselves for a more intrusive approach to regulation in areas such as access, quality and standards, and consumer/student protection, as well as a greater focus on enforcement. It will be more important than ever for institutions to have clear processes and accountabilities for discharging regulatory requirements and for identifying and addressing potential breaches as quickly as possible.  

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Do employees still need to go to work if there’s a fuel shortage?

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Fuel shortage in the UK

There has been a perceived fuel shortage across the country, leading to panic at the petrol stations. Long queues have been building outside petrol stations across the UK over the past week amid fears that fuel supplies could run out – leaving many motorists unable to fill up their vehicles.

Matt McDonald, partner and expert employment solicitor, explains how employers can best support their employees during the fuel crisis.

Can I ask my staff to use alternative transport, even if it costs more?

“If it’s feasible for employees to commute using alternative transport, you can ask them to do so.

“If this fuel shortage results in the employee incurring additional costs or having to travel for longer, technically, this isn’t an employer’s problem as it is up to staff how they commute to and from work. That said, some employers may choose to cover any extra costs incurred by employees.

“It is also worth bearing in mind that those employees who can work from home – and presumably have done to a large extent over the past 18 months – will probably expect to be allowed to do so, at least in the short-term, if the alternative is a more difficult or expensive commute.

“Employers should consider taking a pragmatic approach in this regard to ensure harmonious employee relations.”

Can my employees raise a complaint if they have to find alternative modes of getting to work?

“They might well do so, but it is ultimately up to the employee how they get to and from work.

“As such, where an alternative mode of transport is feasible, employees who complain are unlikely to be in a strong position.

“Employers who choose to cover extra travel costs will largely be doing so to maintain goodwill rather than because of any legal obligation because of the fuel shortage.

“The position is different for those employees driving for work, for example visiting customers or clients.

“For travel of this nature, the employer is much more involved and can’t simply ask an employee to use alternative forms of transport and expect them to accept any extra cost.

“At the very least, the employer would be expected to cover the costs of trains or taxis, for example, and it’s important to communicate with employees clearly on this front so they understand what is required of them.”

What action should I take if I think my employee is using the fuel shortage as an excuse not to come into work?

“If an employee fails to attend work without good reason, this will generally be a disciplinary matter. However, it’s important not to jump to conclusions and to investigate any incident thoroughly.

“Many employees simply won’t be able to attend work other than by car and it may be viewed as harsh to expect employees in this situation to pay for taxis, particularly if there are feasible alternatives, such as working from home in the short-term.

“Hopefully, the fuel shortage will only be a temporary problem. However, there are suggestions it could become a longer-term issue, so employers would be wise to think through the impact this will have on their various different employees and to plan and communicate with staff accordingly.”

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Corporate team complete £369m AUM transfer for Mobeus Venture Capital Trusts

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New deal with Mobeus Venture Capital Trusts

After an extensive due diligence process led by Shakespeare Martineau, the boards of the four Mobeus advised venture capital trusts (Mobeus VCTs) have unanimously approved the transfer of their management contracts – relating to combined assets under management (AUM) of £369m – from Mobeus Equity Partners (Mobeus) to Gresham House as part of the £36.1m acquisition by Gresham House of Mobeus’ VCT business.

Following completion of the acquisition, which is expected to take place at the end of September, the Mobeus VCT team – comprising 16 full-time employees, including two partners, plus three consultants – will transfer to Gresham House, a specialist alternative asset manager offering funds, direct investments and tailored investment opportunities, which includes managing the existing £486m AUM Baronsmead VCTs.

Corporate partner and head of investment funds Kavita Patel and corporate legal director Peter Mayhew, both of Shakespeare Martineau, acted on behalf of the four Mobeus VCTs as part of the transaction.

Kavita said: “We have acted for the Mobeus VCTs for the past 20 years, so we’re delighted to have supported them in the transfer of their management contracts to Gresham House. This represents a new step in the evolution of both the Mobeus and Gresham House VCT businesses, with increased prospects for shareholders flowing from the combined capability.”

Peter added: “The boards have taken their responsibilities very seriously and we have assisted them in undertaking significant due diligence, in particular, to ensure that the transaction is in the interests of shareholders.”

Following completion of the acquisition of Mobeus’ VCT business and transfer of the Mobeus VCTs’ contracts, the enlarged Gresham House strategic equity division will have six VCTs under management with more than £850m AUM – creating a leading player in the VCT market.

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Kavita specialises in a broad range of corporate finance transactions, both for public and private companies, including acquisitions, disposals, joint ventures, funding arrangements, restructurings and cross-border transactions.

With the push towards trust, transparency and compliance, your legal partner will quickly become one of the most powerful tools in your arsenal. With robust commercial processes, well-managed operations and a determined approach to business leadership and growth, there is no reason why businesses won’t just survive, but truly thrive.

Our corporate team has had an outstanding start to the year, totalling more than £4 billion in deals - a new record for the firm.

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Certain key insolvency measures to be phased out

New Legislation

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Key insolvency measures

Creditors will be able to issue Winding up Petitions against individual corporate debtors owing more than £10,000 from next month, even where debt may be “Covid related”. Commercial rent arrears are still excluded.

The Government has announced that measures put in place to protect business from insolvency during lockdown and the pandemic are to be phased out from 1 October 2021.

The Corporate Insolvency Governance Act 2020 was brought into force in June 2020 to prevent creditors from issuing winding up petitions and enforce insolvency.

Updated legislation will:

  1. See the debt threshold for a winding up petition be raised to £10,000 or more
  2. Require creditors to seek proposals for payments from a debtor business and allow 21 days for a response before proceeding with a winding up petition.

These measures will be in force until 31 March 2022, when it is expected that legislation will return to pre-pandemic measures.

What this means for businesses

Those will smaller debts will have more time to rebuild balance sheets and reserves ahead of the March 2022 deadline.

Those with larger debts, should be aware that the threat of the business being wound up (which has been very much in the background for many months) will now be an important consideration in the viability of the business going forward.

Directors should be looking at all options including; restructuring, refinancing and negotiations with creditors to avoid facing winding up petitions next month.

What this means for creditors

Creditors should consider the options available to them, where they have corporate debtors owing £10,000.00 or more. Where the debt cannot said to be legitimately disputed, businesses can again look to the demand and petition route as a means of enforcement.

We are expecting to see many of our creditor clients use this procedure straightaway, particularly against those debtors who are considered to be zombie companies or those who have not engaged or co-operated with them over the last year.

For debts less than the £10,000 threshold, creditors should continue negations with debtors and recover what they can through the courts or mediation.

What this means for landlords

For landlords there is no change to the legislation and tenants maintain protection from eviction until 31 March 2022.

Businesses should pay contractual rents where they are able to do so. However, the existing restrictions will remain on commercial landlords from presenting winding up petitions against limited companies to repay commercial rent arrears built up during the pandemic.

Full details of when and how the Government’s rent arbitration scheme will come into force are still to be confirmed.

For support with matters relating to restructuring, contact Andrew.Taylor@shma.co.uk

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Andrew works with companies, insolvency practitioners and lenders on restructuring and turnaround options.

He also advises on formal insolvency issues including the sales of assets and undertakings, validity of security/appointment, asset realisations, director’s conduct and antecedent transactions.

In any situation when things take a turn for the worse, our corporate restructuring and insolvency team work closely and quickly with clients to assess options deliver the best possible commercial outcomes where possible.

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Recruitment challenges lie ahead for the social care sector

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Recruitment and the social care sector

Recruitment and retention have been ongoing challenges for the social care sector for many years, and the end of free movement means they’re unlikely to improve any time soon.

Historically, workers from the European Economic Area (EEA) have been a lifeline for the sector but with further barriers created for those living abroad, this may be about to change. As well as causing difficulties for applicants, the new immigration scheme has significantly increased the amount of administration involved for care homes.

Obtaining a sponsor licence

It is now essential for applicants to be sponsored by their employer, in order to gain a work visa.

This is an additional responsibility for care homes, which will be tasked with applying for and maintaining a sponsor licence, which can be renewed every four years. Having a licence will require additional compliance for employers and failure to meet their responsibilities may result in scrutiny, UK Visa and Immigration sponsor team.

Financial implications

It should be noted that a sponsor licence isn’t free. Alongside the Government visa fees, the total cost for a single applicant working for a medium to large organisation could cost and employer a minimum of £5,500.

There is also the issue of the minimum salary threshold for work visas, which is currently set at £25,600. Many of the roles in the social care sector would fall below this figure, meaning care homes would need to increase salaries to fill the gaps.

These significant financial considerations now raise the question of whether sponsoring someone from outside the UK is financially viable for organizations. Especially when it cannot be guaranteed how long a worker will stay in the role.

The Government’s stance

In 2020, the Government did introduce a specific Health and Care Worker visa to reduce the issues affecting the sector, but this is largely targeted towards those working for the NHS and many care workers will not be eligible.

However, the Shortage Occupation List may provide some much-needed support if difficulties continue. Once a job role is placed on the list, applicants can trade points against a salary that is up to 20% below the minimum salary threshold, preventing the need for increased salaries. The Home Office has commissioned Migration Advisory Committee (MAC) to undertake an independent review of the impact of the immigration changes on the adult social care workforce that closes on 29 October 2021. Over the next few months it is vital for employers and representative organisations, who are facing extreme recruitment difficulties to engage with MAC to ensure their voice is heard.

Mandatory vaccination

Despite a social care recruitment drive recently being launched, there are many issues still deterring people from working in the sector, such as low pay and high stress. The introduction of mandatory COVID-19 vaccinations from 11 November 2021 is also unlikely to help.

Although the reason behind making the vaccine mandatory is reasonable, it does run the risk of putting more people off the care sector. While employers are able to rely on a legislative basis for dismissing staff who refuse to have the vaccine, it would still leave them in a tricky situation.

Mandatory vaccines will also result in further administrative tasks for care home operators, with robust policies needed to clearly define the requirements of both workers and visitors.

This could be even more complicated for foreign workers, as every country has its own vaccination process. While there is the potential for Home Office-approved clinics being set up in each country, which would allow visa applicants to get a certificate to confirm that they’ve been vaccinated, this would come as an additional cost to the employer.

The social care sector faces some considerable recruitment challenges moving forward, and gaps will need to be filled. Having an understanding of the new immigration system is vital, helping to avoid any further difficulties later down the line.

Get in touch with our  healthcare or business immigration team to find out how they can help.

Watch our Immigration Webinar

Recruiting post Brexit? This webinar provides employers with an overview of how the new system will shape our future recruitment practices and provide practical solutions to support businesses to prepare today.

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Tijen works with global UK businesses advising on strategic international recruitment and supports with immigration compliance facilitating assignments and relocation.

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Protecting the vulnerable investor

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Protecting investors

As the marketplace continues to evolve at a rapid speed, investing is becoming easier than ever, particularly for younger people. However, this increasing simplicity when it comes to making gains and losses has led to experts asking whether more needs to be done to protect this ‘vulnerable’ demographic.

Recognising a vulnerable investor

The Financial Conduct Authority (FCA) defines a vulnerable investor as ‘someone who, due to their personal circumstances, is particularly susceptible to harm, particularly when a firm is not acting with appropriate levels of care’.

While this has previously been regarded as older people, the rise in young investors is prompting the question of whether this definition needs to be expanded further.

The role of the FCA

Cryptocurrency and trading success stories are often covered widely by the press, so it is no surprise that young people are lured into the world of investing. However, with less financial resilience, making a loss could have significant consequences for them.

While the FCA is taking measures to provide greater protection, due to only regulating specific sections of the wider investment market, it is somewhat limited in terms of what it can control. Many of the cryptocurrency trading platforms that are popular with younger people, fall outside of the FCA’s control.

Protecting young investors

Protecting a younger demographic of investors is an industry wide issue. FCA-regulated or not, it should fall to the society to protect the most vulnerable by raising awareness of the risks involved with investing. Rather than introducing new regulation, which could stifle innovation within the industry, the FCA should be more focused on promoting awareness.

Regulated providers should continue to assess who they regard as vulnerable and focus on producing products that take that risk into account, as well as offering advice on how best to protect new investors.

To help reach the wider market, it would be wise to get larger, well-known advisers on board to help protect and inform younger, more vulnerable investors. As influential voices in the market, sharing their approaches and advice is highly likely to get noticed by smaller businesses.

Unregulated investment product providers could consider crafting a set of principle-based rules. These could offer advice around what should and shouldn’t be said when promoting the product. Although these rules would only be advisory, the more involved they are in promoting them, the greater the impact they would have.

Working together

While there will always be some reckless businesses that expose their customers to greater risk, the vast majority of those operating outside of regulation intend no harm.

With a high appetite for risk and a lack of resilience, the industry must work together to raise awareness and offer advice in a bid to protect young investors.

Get in touch with our  investment funds  team to find out how they can help.

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Kavita is Regional Head for our South region and also Head of our Investment Funds sector. She has a formidable reputation amongst her clients for technical excellence.

She specialises in a broad range of corporate finance transactions, both for public and private companies, including acquisitions, disposals, joint ventures, funding arrangements, restructurings and cross-border transactions.

Our depth and breadth of expertise in the investment funds marketplace means we can help you navigate through what can be a complex arena. Whether you’re a fund manager or an investor, we can advise you how and where to invest, how to establish and structure a new fund, build a portfolio and ultimately, realise value from your investments.

 

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Enhancing the hybrid working experience with home workspace loans

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Home workspace loans for hybrid working

Hybrid working is expected to become the new normal for many and while it offers great flexibility, it has left some people working in less-than-ideal circumstances.

However, with employers having a duty of care for their employees, now is the time to consider how they can help to create the best working conditions for those continuing to work from home.

Offering a ‘home workspace loan’

Some employers may wish to introduce an interest-free ‘home workspace loan’, which can be packaged as an employee benefit. This would provide financial support for staff looking to make their remote working conditions more comfortable.

The terms of the home workspace loan are at the business’ discretion, so it can be tailored to suit both employer and employee. Terms to consider include:

  • Timeframe
  • Eligibility
  • Repayment options

If businesses choose to introduce this perk, it must be approached in a fair and inclusive way, to ensure all employees are given the chance to make as many changes as necessary.

Not a normal loan

It is important to remember that this type of loan is different from those offered by banks and other finance providers.

It is not a regulated credit agreement and doesn’t fall under the Financial Services and Markets Act 2000, meaning it isn’t regulated by the Financial Conduct Authority (FCA).

Offering the loan as an employee perk does mean that certain levels of bureaucracy can be avoided. However, to ensure that it is not deemed a regulated activity, there are strict rules to follow. If these are not adhered to, the loan scheme will require authorisation.

Understanding the differences

The first major difference between this loan scheme and a standard loan is the structure of the agreement. The home workspace loan requires the agreement to be between a borrower and lender alone, meaning the employer cannot get involved with any of the chosen contractors or suppliers.

Another aspect to consider is the interest rate. In most cases, it’s advisable that it is offered on an interest-free basis, which would make the terms more beneficial to the borrower than the lender, showing a focus on employee wellbeing.

Lastly, the agreement cannot be a ‘restricted use credit’. Employees should be free to use the money how they see fit within the purpose of the loan and the employer cannot interfere.

Keep your employees informed

When communicating the loan to the workforce, it is important to be transparent and not misleading. The terms and expectations must be laid out clearly, so workers understand the risks and costs involved with the agreement.

While the loan is an effective way of supporting staff working remotely, it may not be the right fit for every business. For smaller companies that might not have the financial capacity to offer a full loan to every employee, they may wish to provide smaller loans or purchase furniture outright.

Remote working has brought many positives, including creating a better work-life balance for employees, but it has left others struggling. By offering home workspace loans, employers can provide their teams with everything they need to do their best work.

Get in touch with our  debt and asset recovery team to find out how they can help.

Find out more about our home workspace loan fixed fee

For a fixed fee, our team of consumer credit experts work with you to set up a home workspace loan benefit for your employees quickly and efficiently.

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Eddie works with a highly skilled team to deliver industry specific advice to the asset finance and leasing sector.

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  • New policies on distancing, vaccinations and hygiene regimes.
  • Flexible and hybrid working policies.
  • Additional benefits for employees.
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CCTV and GDPR: what employers need to know

Health Secretary Matt Hancock was recently forced to resign after his affair was leaked via CCTV footage. Following the very public scandal, concerns have now been raised around the GDPR and privacy issues associated with CCTV in the workplace.

So, what do employers need to know when implementing this technology?

Identifying and mitigating risks

Before installing CCTV, employers should carry out a data protection impact assessment (DPIA), that will identify the risks of handling the footage and potential mitigation routes.

Employers should consider minimising the impact on people’s privacy, for example by keeping cameras restricted to communal areas only and not recording sound.

The DPIA should also identify the legal basis that the employer has for using the CCTV. If this relies on “legitimate interests” then these must not prejudice individual interests, rights and freedoms.

Informing the workforce

Even with a DPIA on record, employers are still required to speak to all relevant stakeholders in the business, including employees. All affected parties should be made aware that their data is being captured, this includes visitors to the building.

Consent cannot be relied upon as a lawful basis for processing this data, so employees will need to be able to access a privacy policy that includes how the data will be used, how it will be stored and how long for, and who can access it.

Covert cameras

Should an employer have specific concerns about an individual employee, there is no law against the use of covert cameras. However, they will still be required to demonstrate that there is a lawful basis for planting one and carry out a DPIA to cover the circumstances.

Failure to do so, could result in a claim for breach of privacy.

Right to object

Even when fully informed about CCTV, employees are still within their right to object. If a member of staff shares concerns about the way their data is being processed, the employer should firstly offer to provide a more in-depth reasoning for the monitoring. If the worker remains unhappy, then the employer will need to consider how best to move forward.

If one particular camera is of concern, the solution may be to remove it. However, if it is the concept of the CCTV itself, the employer should consider whether the employee’s individual rights are likely to override the legitimate interests they seek to protect. If they believe this isn’t the case, the cameras can remain.

Should the concerns continue, then the business may be faced with a claim for breach of data protection legislation and right to privacy. The employee also has the option to escalate the complaint to the Information Commissioner’s Office (ICO), which has the power to investigate and issue fines for GDPR breaches.

As the technology becomes more affordable, the interest in CCTV across businesses of all sizes increases. Seeking legal advice before implementation, can help employers ensure that they are following the correct GDPR processes and avoid costly fines down the line.

Get in touch to find out how our GDPR team can help.

We have launched our guide to recovery and resilience, helping to support businesses and individuals unlock their potential, navigate their way out of lockdown and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. VisitSHMA® ON DEMAND.

 

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Guides & Advice

Director's duties and insolvency in a post global pandemic

Many businesses are continuing to struggle as a result of the ongoing pandemic and while many will bounce back, unfortunately others may struggle. If your company’s solvency is at risk or could be in the future, as a director there are various legal issues and responsibilities you need to be aware of.

Here we take a look at directors duties.

What are director’s duties?

Generally, its directors owe the following duties to a company:

• to act bona fide in its interests
• not to act for any personal or collateral purpose
• to take steps to avoid loss to its creditors
• not to enter transactions at an undervalue or make preferences; and
• to act in the normal manner of a director such as keeping proper accounts, disclosing interest(s) in transactions with a company, not to make a secret profit, etc.

All such duties fall equally on executive and non-executive directors.

CBILS and other government coronavirus support

Many companies benefitted from government support through the global pandemic. What happens now, and do the directors of a company have personal liability, if the company does not come through the global pandemic, or if it does, regardless?

In the case of a CBILS loan (or other financial support) such personal liability might arise if inaccurate information was provided on the application or if the CBIL was used for personal purposes rather than for the economic benefit of the company. This liability could arise regardless of whether a company is in financial difficulties.

Recently the government announced proposals for various extensions of support whereby the global effect is the prohibition of enforcing non-payment of commercial rent against tenants (until March 2022!).

Many reports are stating that the extensions in this regard are ‘good news’ for commercial tenants, and while that may be the case for some, directors of tenant companies need to take a serious look at their finances and consider whether accruing further debt is in the best interest of their business.

Directors need to ask themselves; is this sustainable and is this a viable model for their business?

If not, they could be acting in contravention of their duties and could be facing serious consequences as a result of misfeasance and breaching the Insolvency Act.

It’s important that directors remember that this debt (whether it be a CBIL loan or commercial rent) will have to be paid back at some point and they take action now to protect their businesses as well as protecting themselves from the personal liability of their business going under.

Moreover, when a company is liquidated (or enters a formal insolvency process), the limited liability structure typically means that directors are not generally liable for the debts of the company.

That said, exceptions to this rule do exist, and one is when directors have not fulfilled their statutory duties. In that scenario, directors can face personal liability for debts incurred by the company.

Directors’ potential personal liabilities

Again, in the general of terms, the directors of a company, if found to have failed in the duties they owe to a company, could have personal liability under the following various sections of the Insolvency Act 1986:

• Misfeasance (section 212)
• Fraudulent trading (section 213)
• Wrongful trading (section 214)

The government suspended liability under the wrongful trading provisions (section 214) however that “suspension” has yet to be fully tested in the courts and the personal liability provisions under misfeasance (section 212) and fraudulent trading (section 213) remain in full force.

Practical guidance for directors

As a director steps can be taken to limit any personal responsibility. It is essential that any steps taken are properly documented, since the actions of the directors will be carefully scrutinised by any future insolvency office holder of a company.

• Consider the tests for solvency in the context of a company
• Seek professional advice
• Take advice individually at some point in view of the personal risks involved in management of a company approaching insolvency
• Monitor the financial position of a company
• Continue to scrutinise transactions and ensure all are legitimate and for the benefit of the company
• Formulate a viable strategy
• Hold regular meetings
• Seek valuation(s)
• Keep major creditors informed
• Review financial obligations

Contact us 

Should you require specific legal advice on any of the issues raised in this bulletin (or generally in terms of director’s duties and insolvency please contact Catherine Moss or Gareth Hegarty or another member of the insolvency team in your local office.

Get in touch with our corporate team to see how we can unlock the potential in your business.

Our corporate team is ranked as a Leading Firm in the Legal 500 2021 edition.

Our updated guide to recovery and resilience covers everything you need to navigate your organisation out of lockdown, unlock your potential and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.

From inspirational SHMA Talks to informative webinars, we have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

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Deal

US cultural exchange company broadens horizons with UK travel organisation acquisition

US-based travel company International Training & Exchange Inc (Intrax) has acquired UK youth travel organisation Invasion Group Ltd, with the support of law firm Shakespeare Martineau.

The acquisition forms part of Intrax’s strategy to expand outside of the US into UK and overseas markets. Intrax has a presence in more than 100 countries around the world with 22,000 participants at its programs each year, including summer camp placements, high school exchange programmes, global internships, au pair and work/travel opportunities.

Invasion, which has headquarters in Manchester, offers young people holiday, volunteering and work opportunities across the US, Canada, Asia and Australia. With clear business synergies between the companies, Intrax is well placed to utilise the existing brand awareness and stretch created by the Invasion brands for its overseas and US expansion.

Acting on behalf of Intrax and its UK subsidiary, Shakespeare Martineau supported the travel company on this major strategic international acquisition, including providing corporate, real estate, tax, intellectual property and employment law advice on the acquisition and on-going matters.

Catherine Moss, partner at Shakespeare Martineau led the deal, she said: “The travel industry has taken a massive hit this year, but pent-up demand is going to see a surge in appetite for holiday and career-related travel in people of all ages. This is a great deal for both parties, with clear commonalities and shared ambitions. We were very pleased to help Intrax move into new markets with the acquisition of this exciting UK brand.

“The deal was conducted entirely virtually from start to finish.

Marcie Schneider president of International Training & Exchange Inc, said: “The acquisition of Invasion is a significant step in broadening our reach and we plan to support the brand with investment to grow its operations across the US and internationally.

“This is a significant milestone in our company’s history and we look forward to a resurgent and bright future for our global business.

Shakespeare Martineau team included Jon Heuvel, Christopher Von Strandmann, Kim Walker, Simon Robinson, Oliver Gutman, Georgia Keogh and Santina Taylor.

Contact us 

Get in touch with our corporate team to see how we can unlock the potential in your business.

Our corporate team is ranked as a Leading Firm in the Legal 500 2021 edition.

Our updated guide to recovery and resilience covers everything you need to navigate your organisation out of lockdown, unlock your potential and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.

From inspirational SHMA Talks to informative webinars, we have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

SHMA® ON DEMAND

Listen to our SHMA® ON DEMAND content covering a broad range of topics to help support you and your business.

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Deal

East Imperial just the tonic for Bermele PLC in £24 million deal

Bermele PLC has purchased branded premium mixer specialist East Imperial in a deal worth more than £24 million, with the support of law firm Shakespeare Martineau.

In addition to the acquisition Bermele PLC also raised £3 million by way of a placing and will be re-admitted to the standard list and trading on the London Stock Exchange. Shakespeare Martineau supported the company in the acquisition and fundraising, having advised on its Initial Public Offering in 2017, then raising £1 million.

Pitted as Fever Tree drinks main competitor, New Zealand-based premium mixer supplier East Imperial produces and markets a line of 11 branded premium mixers that sell throughout the Asia-Pacific and the United States of America and has sights set on the UK market.

Anthony Burt, CEO of East Imperial, said: “Our London listing is an exciting opportunity for us to accelerate our growth and benefit from the increasing demand we’ve seen for ultra-premium mixers among consumers across the globe. We’ve got a great platform to build our market share across Asia, the US and Europe and we want to replicate our success in new regions including the UK.

“We’ll also be investing in our multi-channel offer to deliver our premium mixers direct to consumers who want to enjoy them at home, a trend which has accelerated over the last 18 months.

Toby Hayward, non-executive chairman of Bermele Plc, said: “I am delighted that we are today announcing the proposed acquisition of East Imperial Pte. Ltd.  Naturally we turned for legal advice to Keith and his team at Shakespeare Martineau, they having dealt with the original IPO and have been very pleased with their advice and assistance.

Keith Spedding, partner and business transaction specialist at Shakespeare Martineau led the international deal and re-admission on behalf of Beremele PLC, he said: “This is yet another example of a great investment made in international businesses by UK listed companies. Food and drink is a sector that continues to see growth and the additional funds generated will provide a springboard for the brand’s entry into new regions and territories.

Keith was assisted by associate Jennie Davis and solicitor Gweni Rees-Evans. Tompkins Wade (New Zealand), Longbow Law Corporation (Singapore) and Smith Gambrell Russell (United States) supported on the overseas aspects. Fasken advised East Imperial.

The deal will see Bermele PLC acquire East Imperial for an aggregate consideration of £24.45 million and is conditional on shareholder approval.  It is expected to be admitted to trading on  19 July 2021.

Contact us 

Get in touch with our corporate team to see how we can unlock the potential in your business.

Our corporate team is ranked as a Leading Firm in the Legal 500 2021 edition.

Our updated guide to recovery and resilience covers everything you need to navigate your organisation out of lockdown, unlock your potential and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.

From inspirational SHMA Talks to informative webinars, we have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

SHMA® ON DEMAND

Listen to our SHMA® ON DEMAND content covering a broad range of topics to help support you and your business.

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Guides & Advice

Your summer guide to recovery and resilience in COVID-19

Your updated summer guide to recovery and resilience

As the UK takes its first steps to ease the current national restrictions and looks forward to an increase in economic activity and recovery it is vital that businesses are prepared in every aspect.

To support businesses and people navigate their way out of the last year and the current national restrictions, unlock their potential and drive for a brighter future, we have updated our guide to recovery and resilience.

From financial considerations, employees, leadership and premises, to supply chain implications, health and safety and protecting your private wealth, our guide highlights what organisations and individuals should consider when moving from survival to recovery to thrive.

Financial considerations

Whether a large corporate with a highly structured board, an SME or an owner-managed business, the financial viability of a business is key to its future success.   However, as the thoughts turn to the roadmap out of lockdown once again, and what the future may look like, businesses that have got through the last year should consider a range of measures to enable them to cope with what is likely be a recession for some industry sectors of the UK. Prudent business owners will be well aware of the predictions and while there will be a bounce back it may take some time for confidence and stability to return from customers and suppliers.

Your employees

Managing a workforce of any size can have its challenges, let alone one that is recovering from a global crisis. Many businesses will have furloughed employees or made the difficult decision to make a number of their workforce redundant. For those businesses that haven’t, it’s highly likely they will still face having to make difficult choices, albeit further down the line.

The knock-on effects of the COVID-19 outbreak have changed the way employers engage with and effectively manage, their employees. The processes, policies and guidelines that worked previously may no longer be fit for purpose for your business, or for your workforce, in the new working landscape. With the rollout of the COVID vaccine facilitating the gradual return of employees back into the physical workplace, this in itself will bring a host of new opportunities and challenges.

Buildings, workspaces and leases

As the world and economy move forward out of lockdown, owners and investors of real estate as well as occupying tenants will have to consider the adjustments they now need to make whilst the restrictions around social distancing continue.
They will need to find new ways of working and inevitably different ways to use their space over the coming months and, at the same time, consider how to manage the cost of premises in these changed circumstances.

Suppliers and supply chain

Many businesses have struggled to comply with their contractual obligations as a result of the COVID-19 pandemic and may have been forced to rethink their supply chains. A focus in recent years on minimising costs, reducing inventories and maximising asset utilisation has often resulted in a reduced ability to cope with disruption. Whilst the impact of the COVID-19 pandemic is unprecedented in modern times, disruption to the global economy is an increasing risk, whether due to political events such as Brexit, US-China trade tensions, or climate change.

Private wealth, family businesses and family

The effects of COVID-19 will undoubtedly have a huge impact on our economy for years to come, with many businesses collapsing under the strain and the level of unemployment set to rise significantly. However, what is less widely reported on is the effect it is having and will continue to have, on families and personal wealth. We’ve already seen that the pandemic has led to an increase in people looking at how they may pass on their wealth to the next generation –and even more so for those that own family businesses.

Compliance – Health and safety

Employers have clear duties under existing health and safety legislation. Obligations to comply with health and safety at work, and to manage and control workplace risks, includes protecting workers and others from the risk of COVID-19 infection in the workplace. That duty is to do everything “reasonably practicable” to manage these risks. The onus of demonstrating that everything reasonably practicable has been done falls to the employer. The best way to demonstrate compliance with the law is usually to follow government and industry-led guidance wherever possible.

Leadership

Strong leadership is a cocktail of authenticity, collaboration, passion, compassion, and a great deal of bravery. We all know the best results occur when we are pushed out of our comfort zones and the ingredients are shaken up, and COVID-19 has done exactly that. With government guidance signalling the UK’s route out of current national restrictions, the time for positive leadership is now. It’s time to take control of what we can and create an environment with enough certainty where people can feel safe enough to flourish centre stage.

We are here to help

The team here at Shakespeare Martineau remain committed to supporting our clients and our communities throughout these challenging times, with

the depth of experience, collaborative ethos and the creative know-how to lead positively to the future.  We are able to offer advice and solutions on a range of subjects for life and business - from employment and general business matters, through to director’s responsibilities, insolvency, restructuring, funding and disputes to issues affecting family businesses, personal wealth planning and family law. Do contact us on 03300 240 333

 

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News

Corporate team hits £4 billion deals milestone

Our corporate team has had an outstanding start to the year, totalling more than £4 billion in deals - a new record for the firm.

Completing an average of three deals per week in the first quarter from January to March this year, we have supported ambitious businesses with their transactions across the length and breadth of the country. The deals, spanning the East Midlands, West Midlands and South East regions, form part of recent growth plans at the firm, which aims to double in size by 2023.

The blockbuster £4 billion figure includes retail sector work, notably the recent Dr Martens float, which raised £1.3 billion in new funds at a market capitalisation of £3.7 billion. We’ve also supported a number of fast growing tech businesses, including Solid State, Monovate, cybersecurity start-up fcase, biotech manufacturer Legume Technology and longstanding engineering client, Avingtrans.

Highest value of deals the Midlands

As well as coming out on top as the leading firm in the Midlands in terms of deal value in the latest quarterly M&A league table by Experian, we were also one of the top three law firms in the region for the volume of transactions, completing an impressive 14 over the Q1 period.

Duncan James, head of corporate at Shakespeare Martineau said: “This high level of activity is what everyone wanted to see coming into 2021. Even though some deals were pushed through ahead of changes in the Budget, we’re still seeing that money is still flowing around the country and business is largely carrying on as normal.

“There is a lot of liquidity in the market right now, and plenty of opportunity for deals, investments and cash raising. We’re seeing a lot of investment activity in the engineering, biotech, manufacturing and healthcare space, particularly in the East and West Midlands markets.

“The sheer variety of sectors we’ve worked with across all of our offices and geographies shows the expertise we have within the corporate team and across the firm more widely. Our people are working with some of the sharpest minds in the business world, guiding industry-leading transactions.

“We’re always on the lookout for fresh talent too and if anything, our first quarter this year shows that any new joiners would be involved in some incredibly interesting work.”

Contact us 

Get in touch with our corporate team to see how we can unlock the potential in your business.

Our corporate team is ranked as a Leading Firm in the Legal 500 2021 edition.

Our updated guide to recovery and resilience covers everything you need to navigate your organisation out of lockdown, unlock your potential and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.

From inspirational SHMA Talks to informative webinars, we have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

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Deal

Lung cancer detection technology acquired in £21 million deal

Bould Opportunities has acquired Cizzle Biotechnology Limited in a multi-million pound deal, and raised more than £2.2 million, conditional on shareholder approval.   The combined entity will be listed on the Standard list and London Stock Exchange, with the support of Midlands law firm Shakespeare Martineau.

Cizzle Biotechnology, which is a spin-out from the University of York, is focused on patent protected technology for the early detection of lung cancer through the development of a blood test for the CIZ1B biomarker, and has been sold to Bould Opportunities in London for a total consideration of £21 million.

Bould Opportunities, a formerly AIM quoted company, was seeking acquisitions after disposing of its existing trading subsidiaries.

Allan Syms, chairman of Bould Opportunities, said: “I am delighted to have exchanged on the acquisition of Cizzle Biotechnology. I believe that the acquisition presents huge value for Bould Opportunities, with a technology looking to address an urgent clinical need. Shakespeare Martineau has been excellent in supporting us and Cizzle Biotechnology through the process, they understand our sector and have helped us get the best possible outcome for all stakeholders.”

Keith Spedding, partner and business transaction specialist at Shakespeare Martineau led the deal on behalf of Cizzle Biotechnology Limited, said: “The biotech industry is absolutely fascinating, we are seeing huge movements and rapid growth in this market as clinical need increases and technology and innovation races to keep up.  It’s been a long journey but great to get this deal done which will allow Cizzle now to continue to develop its blood test for the benefit of many in the continuing fight against cancer.

Keith was assisted by Jennie Davis and Gweni Rees-Evans.

Helping to detect lung cancer early

According to Cancer Research UK, in 2018 there were 17 million new cases of lung cancer globally with cases expected to grow to more than 27 million by 2040.

Allan continued: “Lung cancer is incredibly hard to diagnose at an early stage as there are few clinical symptoms. However, I believe that Cizzle Biotechnology can provide a solution to this problem through the blood test it is developing for the early detection of a majority of the different forms of lung cancer.”

Allenby Capital Limited acted as financial adviser and Novum Securities Limited as broker.

Dominic Prentis and Richard Pull of Goodman Derrick acted for Bould.

Contact us 

For further information please contact Keith Spedding or another member of the corporate team.

Our updated guide to recovery and resilience covers everything you need to navigate your organisation out of lockdown, unlock your potential and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.

From inspirational SHMA Talks to informative webinars, we have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

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Shakespeare Martineau supports multimillion-pound acquisition of financial coaching business

The East Midlands corporate team at law firm Shakespeare Martineau supported Adam Price, the founder of financial planning firm Hatch Financial Planning, throughout a multimillion-pound acquisition by Octopus Group.

Hatch, which works with the likes of MoneySuperMarket, Sony Interactive Entertainment, Epson, and Experian in offering affordable expert financial coaching, will shortly rebrand to Octopus Moneycoach. Ambitious plans are in place to grow the business from 30 to 200 employees over the next two years and to bring financial coaching to the mass market, with both AI and human advice services available to customers.

As one of the UK’s fastest growing financial services companies, Octopus’s acquisition of Hatch will enable the business to reach a wider audience, helping even more people to access vital financial services. Partnering with other established financial advice businesses already housed within the Octopus Group, Octopus Moneycoach will focus on offering financial coaching and planning to the employees of businesses who are looking to further support their workforce.

Led by Lincoln-based corporate partner Michael Squirrell, the Shakespeare Martineau team supported Adam Price, the founder and CEO of Hatch, on all legal aspects of the transaction.

Of the transaction, Michael Squirrell, said: “Octopus Group is one of the UK’s fastest-growing companies, unafraid to invest in other entrepreneurially-minded businesses.  With Hatch being a leading player in the financial coaching market, the synergies between the businesses are clear and the sale of Hatch proves that there remain plenty of great investment opportunities out there.

“It was a pleasure to act for Adam on the sale, playing our small part in this important step forward on Hatch’s mission. The creation of Octopus Moneycoach to complement Octopus’s existing financial services businesses is the perfect next stage for Hatch.

Adam Price, founder and CEO of London-based Hatch, said: “There is a misconception that financial services are only for corporate giants and multi-millionaires. Hatch’s goal has always been to change attitudes towards financial planning, making it a simple and affordable process for everyone. Octopus Group shares this vision, having consistently championed financial advice, making it a natural partner for Hatch.

“I am hugely grateful to Michael and the rest of the corporate team at Shakespeare Martineau, whose expertise and guidance made the acquisition as smooth as possible.

The Shakespeare Martineau team involved in the acquisition comprised Michael Squirrell, Oliver Gutman, Sam Naunton, Oscar Ciaurro and Tait Grundy.

Contact us

For any further information contact Michael Squirrell or another member of our corporate team.

Our corporate team is ranked as a Leading Firm in the Legal 500 2021 edition.

Our updated guide to recovery and resilience covers everything you need to navigate your business out of lockdown, unlock your potential and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.  

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

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Shakespeare Martineau helps cyber security start-up secure investment

We supported fcase with securing investment from start-up and scale-up funders Wayre UK, part of Telefonica’s innovation hub.

fcase, which specialises in fraud detection and prevention orchestration technology, will use the investment to further develop its sophisticated and extremely flexible technology, which centralises and automates the end-to-end framework for fraud operation centres.

Our team, comprising Catherine Moss, Georgia Keogh, Oliver Gutman and Tijen Ahmet, advised on the corporate and tax issues relating to the investment, having previously worked with fcase advising on business immigration.

Catherine Moss, partner and corporate finance expert said: “Cybersecurity, tech and digital are all proving sound investment areas for many funds. With fraud increasing as more people started working from home, it’s innovative technologies like those created by fcase which will make a difference to the safety and security of people and businesses by creating accessible, easy to use digital solutions supporting consumer financial services products. We look forward to continuing with fcase as they grow.”

Emre Sayin, CEO of fcase said: “We found that too often, banks, financial services, and insurance companies face the challenge of siloed anti-fraud systems and operations with little-to-no cross-functional or departmental communication, delivering significant inefficiencies and gaps that fraudsters exploit. For fraud prevention and operations to be effective, the enterprise must be connected and working in harmony via one final fraud orchestration layer connecting and managing point systems, such as anti-fraud.

“With our unified system, enterprises have a full picture of their fraud operations, diminished operational challenges, and a superior customer experience. Not only does fcase set a new standard for fraud operations management, but we also guarantee effective customer support through our 24/7 on-call system.

“This is a really exciting step in our growth journey and the team at Shakespeare Martineau have played a crucial part in getting our business investment-ready.”

Contact us

For any further information, or to see how we can support your business plans, contact Catherine Moss or another member of our corporate team.

Our corporate team is ranked as a Leading Firm in the Legal 500 2021 edition.

Our updated guide to recovery and resilience covers everything you need to navigate your business out of lockdown, unlock your potential and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.  

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

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Blog

Changes to takeovers and the introduction of a more restrictive approach to foreign direct investment: what is the impact on UK businesses?

From the second half of 2021, there will be substantial changes to UK public company takeover practice and procedures.

As a result these will create, within the UK regime, a more uniform framework - less EU-centric in its treatment of regulatory authorisations and clearances, and designed to create a more transparent timetable within which to manage key conditions to takeovers and mergers than that currently set out in the UK Takeover Code.

Above all, the changes are designed to simplify the timetable and enable official authorisations and regulatory clearances (including those required by the UK’s National Security and Investment Bill) to be managed within the timetable for an offer.

Although some of the proposed changes will make some corporate transactions easier, the uncertainties associated with the impact, and the tactical deployment of some of the facets of the new regime (for instance, “acceleration statements” and “acceptance condition invocation notices”), could make the outcome of other transactions more difficult to predict.

Meanwhile, in tandem with the changes to takeover timetables, the introduction of UK’s National Security and Investment Bill (NS&I Bill) - likely to be made law in Autumn 2021 - will create an additional set of conditions to be satisfied for transactions in the sectors to which it applies.

Its introduction, enabling the UK Government to look back five years and potentially to declare a transaction void, is already having an impact on deals with overseas bidders where precautionary pre-notifications are being made.  Although many developed countries around the world, such as Australia and the US, have adopted similar regimes protecting critical national infrastructure and sensitive sectors from external interests, it is the notification and investigatory requirements of the proposed new regime (and its potentially punitive impact) which will most immediately cause concerns for those advising on transactions.

Changes to the Takeover Code

The current Takeover Code creates a relatively flexible takeover regime that can be tailored to the needs of a transaction on consultation with the Takeover Panel.  Although it used to provide special treatment to UK and EU Merger control regimes, the Takeover Code is less helpful where a transaction triggered overseas merger and antitrust and foreign direct investment notifications and filings and the resultant conditionality had to be factored into the UK timetable.

Consequently, the revisions to the Takeover Code (which have been widely consulted on before publication of the Takeover Panel’s consultation paper (PCP 2020/1)) aim to improve this, accommodating official authorisation and regulatory clearance requirements into a simplified, and more transparent, timetable for contractual offers enabling them to be suspended to enable clearance conditions to be satisfied.  Allowing an offer timetable to be suspended within a clear framework to enable a national security reference such as that required under the NS&I Bill is helpful.

Should an official authorisation or regulatory filing be required for a transaction under the new regime, the takeover timetable will be suspended at Day 37 (if both parties agree). Once a clearance has been received (or the relevant condition waived), the timetable will restart at Day 32.  If the parties do not agree to a suspension, the Takeover Panel will determine whether the official authorisation or regulatory filing is material in the context of the offer and then allow, or reject, the suspension.  This will enable certainty of timetable alignment at the outset of every transaction, and therefore less chance a deal could fall through.

An offer must be open for acceptance until the later of ‘Day 21’ and the date on which the offer becomes, is declared unconditional or lapses.  Once an offer becomes or is declared unconditional, it must remain open for not less than 14 days.  Shareholders accepting the offer will now have withdrawal rights from the date of the announcement.

There is to be one single date for the satisfaction of all conditions for a takeover which the bidder will specify.  Unless the Panel has consented otherwise, all offer conditions must either be satisfied, or waived, or the offer must lapse by midnight on Day 60.

The bidder may, by making an “acceleration statement”, bring forward the unconditional date.  In this case, the bidder will be required to waive all of its regulatory conditions and the requirements which are normally imposed on ‘Day 39’ and ‘ Day 53’ will not be applied.

A bidder can seek to invoke the acceptance condition (typically set at 50%) and lapse its offer by serving an “acceptance condition invocation notice” although an offer must still be open to acceptances for a minimum of 21 days.

NS&I Bill

The NS&I Bill is due to be made law in Autumn 2021, further impacting deals with overseas bidders. Countries around the world, such as Australia and the US have adopted similar regimes protecting critical national infrastructure and sensitive sectors from external interests but such major changes tend to imbue mergers and acquisitions with a more cautious tenor until established practices emerge.

The NS&I Bill will protect against investment activities by overseas buyers in 17 key sectors, including civil nuclear, communications, energy, AI and data infrastructure where the Secretary of State reasonably suspects that there is, or could be, a risk to national security as a result of that acquisition of control. A broad range of asset types will be caught including land, moveable property and IP. There will also be a set of trigger events, which enable the Government to scrutinize a broad range of transactions, even at low levels of minority shareholding interest, to determine whether there is a national security risk in that acquisition.

The regime is mandatory for transactions occurring within the 17 key sectors and precautionary notification is encouraged for deals with national security elements; there are no minimum turnover or share of supply thresholds. Proposed acquirers of shares or voting rights in entities operating within any of the sensitive sectors must seek prior authorisation from the new Investment Security Unit within the BEIS. Once the Government has been notified of a transaction that falls within the 17 key sectors, or, an event triggering control, it has six weeks in which to issue a ‘call-in’ notice. The Government then has six weeks to undertake a detailed national security assessment, extendable by nine weeks.

Review

For five years after completion of a deal, the Government has the ability to ‘call in’ a deal for review and to impose substantial sanctions for non-compliance.  The Bill affects deals which completed on or after 12 November 2020 and we are already aware of transactions for which informal representations have had to be made because they fall within the regime’s broad scope.

Practical tips

Although the changes to the Takeover Code have been designed to simplify procedures and respond to the impact of more complex domestic and overseas regulatory regimes, companies and their advisers, and funders, have still to work through the commercial implications of the new timetable, and the risks of the NS&I Bill, and similar regimes, before launching new transactions.

To avoid deals falling through at the last moment, companies should identify the authorisations required and regulatory implications of a transaction with their lawyers, economists and financiers before announcing them.  Meantime, they must also bring their funders with them through this process highlighting the impact of a suspension on a transaction.  Funders, too, will need to price into their bid finance the risks of providing available financing for what could turn out to be a protracted period.

In short, the additional scrutiny of the NS&I Bill (and its overseas equivalents) will bring a more cautious approach to deal-making, as the ramifications of failing to make a notification (with potential fines, imprisonment and the unwinding of concluded transactions amongst a range of penalties) affect not only companies themselves but the availability of financing.

Contact us

For any further information contact Catherine Moss or Keith Spedding for assistance.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director’s responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064.

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Deal

Shakespeare Martineau advises on multi-million pound sale of Prolectric

Our West Midlands corporate team has advised on the sale of Prolectric Services Ltd, a state-of-the-art lighting manufacturer, to international group Hill & Smith Holdings PLC for an initial cash consideration of £12.5 million.

Located across UK, USA, France, India and Australia, Hill & Smith Holdings PLC creates sustainable infrastructure and safe transport through innovation, including galvanizing services, roads safety and security products, and utilities products and services.

Prolectric is a UK market leader in sustainable lighting, power and security. It’s off grid solar energy solutions provide a practical way for businesses to measure the reduction in CO2 emissions versus diesel powered alternatives and meet carbon-saving commitments, as well as reduce noise pollution.

Duncan James said: “This is yet another great example of a fast-growth entrepreneurial businesses taking the next step in its growth journey. We’ve worked with shareholders at Prolectric for many years and are delighted to support this great deal that benefits both parties.”

The acquisition will enhance Hill & Smith’s product portfolio and give the Group a deep understanding of solar technology. Shareholders from Prolectric Services Ltd, including the management team, will be staying with the business.

Gregg Poulter, finance director at Prolectric Services Ltd said: “This deal is good for both parties. Our tried and tested products provide an innovative no emission solution for Hill & Smith’s client base and we gain access to global markets that will benefit from our products, as well as being able to maintain our brand.

“This is a really important milestone for us and the team at Shakespeare Martineau gave the shareholders commercially focussed legal advice which helped bring the deal to a successful conclusion. We’re thrilled with the result of this deal and look forward to an exciting future for Prolectric.”

Contact us  

Find out how our corporate team can support your business.

Our corporate team is ranked as a Leading Firm in the Legal 500 2021 edition.

From inspirational SHMA Talks to informative webinars, we have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

How can we help?

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Deal

Shakespeare Martineau supports Solid State in multi-million pound acquisition

Shakespeare Martineau has supported Worcester-based technology manufacturer, Solid State plc ,with the acquisition of London headquartered Active Silicon Limited for an initial consideration of £6.3m. 

AIM listed manufacturer Solid State produces computing, power and communications products, and is a value added supplier of electronic and opto-electronic components.

Established in 1988, Active Silicon designs and manufacturers imaging and embedded vision systems, allowing the capture, processing, and transmission of image data in high performance and critical environments. With a longstanding, global customer base, Active Silicon’s products have applications in multiple areas of industry, science, and technology - including advanced manufacturing, life sciences, robotics, medical imaging, security and defence  

The acquisition of Active Silicon will boost the manufacturers product portfolio and enables the enlarged Group to address the growing demand for 3D vision and robotic applications, as well as the increased requirements for embedded machine vision and edge AI computing products. As a result, the acquisition also provides scope for the design and manufacture of own brand products and further routes to a global market for the expanded Solid State plc Group. 

The initial consideration of £6.3m which, when adjusted for the cash on the balance sheet, resulted in an effective net initial consideration of approximately £2.7m. It has been funded by the Group’s existing cash resources and banking facilities.  

Keith Speddingcorporate partner, who advised Solid State plc on the legal aspects of the acquisition, said: “We’ve been working with Solid State plc for more than 10 years, seeing them make multiple deals in that time. Its great to a see a West Midlands headquartered firm continue to grow and move from strength to strength in the current challenging environment. There are clearly opportunities in the current market for those with strong businesses. 

Gary Marsh, CEO at Solid State plc, said: “Solid State’s acquisition strategy targets complementary technologies with exposure to structural growth markets.  The acquisition of Active Silicon achieves both of these objectives while additionally broadening the capacity for the enlarged Group to increase its range of own brand products and value-added services.  This marks the sixth acquisition on which Shakespeare Martineau has advised us. The high quality, pragmatic advice provided by Keith Spedding and his team is very much appreciated. 

Contact us 

For further information please contact Keith Spedding or another member of the corporate team.

From inspirational SHMA Talks to informative webinars, we have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

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Blog

2021: a year of potential

Keeping positive can be a challenge during a pandemic, but it’s vital that businesses look ahead to the future and the opportunities that 2021 holds.

Although the economy is flirting with a second recession and some sectors are struggling under nationwide restrictions, the area of mergers and acquisitions is looking promising.

An ideal opening

For businesses that are well-prepared and unafraid to take the leap, the current economic situation means there are plenty of M&A opportunities available.

If the deal market continues to move, British businesses will remain attractive to overseas investors. Making strategic or opportunistic acquisitions while prices stay low, could even accelerate growth plans.

Which sectors are performing well?

Certain sectors that lend themselves to our current climate, such as pharmaceuticals, technology, PPE and MedTech, have all been performing well over the last year, even with the uncertainty caused by Brexit.

Due to this uncertainty, some international buyers may be waiting to see what the post-Brexit landscape looks like before making a move, but many others are still showing an interest in UK acquisitions.

Read our 2021 predictions for the education and construction sectors.

Strategising for the future

Whilst the present remains unstable, it might be difficult to think about future strategies, but it is important to do so.

Industries hit hardest by the pandemic should continue to use the financial support available to them, including the furlough scheme, CBILS and Future Fund. However, they must keep on top of any changes to the current schemes and be aware of when they are set to end.

For those facing less challenges, they should consider whether they are in a position to expand and invest. Many companies are in need of a buyer or strategic partner, and with valuations being difficult to carry out accurately at present, a host of potential investment opportunities have been opened up.

With the changes to Capital Gains Tax (CGT) still looking likely, a short-term deal rush may be on the horizon. As such, businesses and business owners should also be assessing whether they can take advantage of this.

In any market there are always investment opportunities to be had. So, although it may be some time before confidence returns, there’s much to be gained from businesses taking a positive approach to 2021 and readying themselves for growth. 

Contact us

2021 holds plenty of unknowns, but it is also a year for potential and there are many reasons to remain positive. If you have any questions or concerns about issues that may be affecting your business, get in touch and the relevant team will aim to reply to your query within two hours.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director’s responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

SHMA® ON DEMAND

Listen to our SHMA® ON DEMAND content covering a broad range of topics to help support you and your business.

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