Corporate Law

We can help you deal with:

A management buyout is where the core management team of a company work together to buy a company, or part of it.  The buyout may be funded by bank loans or by private equity finance.

A management buy in is where a new management team is brought in to run the business following the acquisition. Management is given a minority stake in the new company and the private equity fund will hold the controlling interest.

There are other similar arrangements known as a buy-in management buy-out (BIMBO) and a vendor induced management buy-out (VIMBO).

We deal with and provide advice on the legal aspects of the following:

• Incorporating companies

The set-up of a new company at Companies House to your specifications. This includes appointing directors, scheduling the accounting year and confirming the initial share capital. Where needed, we can draft bespoke articles of association to create specific rules for your company or different classes of share with different rights attaching to them.

• Issuing and transferring initial shares

When setting up a company, decisions need to be made regarding its ownership, the proportion of the total share capital to be held by each shareholder, and the types (or ‘classes’) of share each individual or company will hold.

Different share classes with different rights

• Share buybacks – To purchase shares from an exiting shareholder
• Capital reductions – To get excess ‘cash’ out of the company

We deal with all aspects of the following:

a) Share Restructuring

• Different share classes with different rights
• Share buybacks – To purchase shares from an exiting shareholder
• Capital reductions – To get excess ‘cash’ out of the company

b) Company Restructuring

Putting a new holding company in and transferring key assets (share for share exchange)

c) Group Restructures

• Demergers to hive-off non-core divisions/companies
• Mergers to combine with another business
• Wind-up/strike off dormant companies

d) Insolvency and Restructuring

Distress sales

Usually involves a joint venture between two companies ie.  they set up a new company for the venture (whether to buy another business, or set up a property holding company, or another venture) and each hold a percentage of the shares.  The joint venture agreement and articles of association of the joint venture company will detail the rights and obligations of each party and deal with funding, management, resources and the return on investment both during the course of the joint venture and/or on a sale/exit.

We deal with all aspects of the following:

1. a) Employee Ownership Trusts (EOT)

They encourage the creation of employee owned companies as an alternative to a trade sale.  A trust company will be established, acquiring a controlling interest in the company.  Tax reliefs available but fairly strict rules and criteria.

1. b) Employee Benefit Trusts (EBT)

These are similar to an EOT but a discretionary trust is created under which assets are held for the benefit of employees as beneficiaries.  There are some tax benefits and the EBT is less restrictive than the EOT

The purpose of share option schemes is to recruit and retain and incentivise staff, as well as rewarding performance and enforcing good/positive behaviours.

We deal with all aspects of the following:

a) EMI Schemes (Enterprise Management Incentive)

These are one of the most popular share-based incentive plans and are often the best approach.  They are very flexible and very tax efficient.  However, they are not available to all companies, due to the qualifying criteria.  These are a HMRC plan.

b) Other HMRC Share Option Schemes

These include CSOP, SAYE and SIP.  These are alternative HMRC plans.  They are less flexible than EMI but still provide capital gains opportunities and income tax reliefs.

c) Unapproved Share Schemes

If HMRC schemes are not available or not suitable, a company can still look to put in place income-taxed arrangements including non-tax advantaged options, phantom options, etc.  These are much more flexible arrangements as a company does not have to meet any qualifying criteria or seek elections/approval from HMRC. They are, by their nature, less tax-advantaged than the HRMC schemes detailed above. Income tax will be charged when an individual makes a gain.

We provide advice on all aspects of the following:

• Directors Duties

The directors of a company are generally responsible for its management, but their powers are constrained by both the company’s articles of association and statutory duties. They are personally subject to these duties and may be liable to penalties should they fail to carry these out.

• Trustee Directors Duties

In situations where a Trustee of a Trust is a company, the director(s) of that company have both obligations and duties to their company and the Trust and may wish to distinguish between the two and understand how they interplay.

We deal with and advise on all aspects of the following:

• Holding BMs

A board meeting is an official meeting of a company’s directors. Certain company decisions need to be approved via a resolution of the directors at a board meeting. More broadly, they can be a useful forum to identify and discuss issues and plan for the future.

• Shareholders Meetings

If a company decision is particularly important, its articles of association (or indeed UK statute) may state that approval by the company’s shareholders is required via a resolution of the shareholders at a meeting. Shareholders meetings may have specific rules governing them to ensure decisions are made fairly.

• AGMs

On top of shareholders meetings called in connection to specific issues that require shareholder approval, unless a company’s articles of association state otherwise, a company’s shareholders (and usually its directors) must meet annually to discuss general business matters and address any resolutions that must be made annually.

• Passing Resolutions

There are several ways in which directors and shareholders can pass resolutions. Most notably, these can be in person or in writing. Each method carries its own restrictions and requirements. Which method is preferable will depend on the context of both the company and the decision to be made.