To describe 2020 as a rollercoaster would be an understatement. In the course of a year we have faced two national lockdowns, a series of local lockdowns and continue to face restrictions on our daily lives. Health and wellbeing is paramount, but naturally the impact on businesses has been unprecedented and never has it been more important to ensure that your business is up to date and compliant with the current regulations and best practice. Doing so not only can avoid claims and unwarranted disputes, but it can protect and maintain the value of your business for the future.

Key things that you should consider are:-

Employees

‘Furlough’ is the buzz word of 2020 when it comes to employment, with many taking advantage of the government backed scheme to retain staff and maintain livelihoods. Ensuring that your scheme is compliant and that communication with staff is clear can avoid claims and disputes.

Premises

With a nationwide-shift to working from home where you can, it is only natural to consider the use of your premises and if it is still required. Many are finding that their employees are equally as efficient from home and prefer the flexibility. If you find yourself in this situation, you should review your Lease to know where you stand on effecting any changes necessary – possibly saving costs in the long-run.

Contracts

With supply chains disrupted and consumers heavily reliant on quick deliveries, making sure that you have robust contracts in place to deal with the impact of lockdown and the changes in how we do business is fundamental.

Governance

Whether you operate a company or are in a partnership, you should ensure that the documents governing the relationship between your business owners are up to date and properly address the ‘what if’ scenarios that, unfortunately, more recently many have been forced to face. How you deal with the incapacity or, in the worst case, death of a business owner can have a substantial impact on its continuity and ability for the business to survive. If you haven’t reviewed your Articles of Association, Shareholders Agreement or Partnership Agreement recently, undertaking this exercise is key to ensure that not only are the relevant concerns covered off, but that the parties clearly understand the documents in order to avoid a dispute in the future.

These are just a few key areas that can have a big impact on your business that you need to consider; this is both in terms of your commercial operations but also in avoiding claims and disputes. But looking at the bigger picture, fundamentally ensuring that your operations are up to date and compliant underpins the value of your business and any potential sale.

As you look to 2021 and the future for your business, you may be considering your own exit strategy. Many businesses do continue to adapt and thrive despite the pandemic and you may find yourself negotiating a sale of your business. Whether this is in 3 months or 3 years’ time, your buyer is going to scrutinise your operations from a commercial, accounting and legal perspective. The question is, will you come up to par? Your offer price would be subject to due diligence and if your buyer unearths legal issues in the course of negotiations, you may find your purchase price reduced or that you become exposed through onerous indemnities to get the deal over the line. To avoid this, you need to ensure that the decisions that you make today ultimately are in your businesses’ best commercial interests, and therefore can still stand to benefit you tomorrow.

The sales process can be daunting, but if you plan your exit and prepare you and your business for the sales process you can address issues in advance and put yourself in the best position necessary and maximise on your sale. Therefore by scrutinising your operations now and ensuring that you are adapting to the pandemic in a compliant manner you are protecting not only your business, but also your own interests in the future.

For information on all our Corporate services, contact Holly Threlfall and our Business Services team on 01604 828282 / 01908 660966 or email BusinessServices@franklins-sols.co.uk.

Franklins Solicitors LLP are pleased to announce that Hannah Ghafari has qualified as a Solicitor, following the completion of her training contract with the Firm.

Hannah joined Franklins as a Paralegal in 2015, after having attained her Law Degree at Oxford Brookes University and also completed her LPC LLM at BPP Birmingham on a part-time basis while working at Franklins. Hannah has obtained a huge amount of experience during her training contract with the Firm having worked in the residential conveyancing department and undertaken seats in Corporate Services and Commercial Property Services. As a qualified Solicitor, Hannah has accepted a permanent role within the Firm’s Commercial Property team, based at our Northampton office.

“Having worked at Franklins for over 5 years; joining as a Paralegal with little legal experience to where I am today as a qualified Solicitor feels very surreal. I wholeheartedly believe that the opportunities and training that I have received at Franklins have allowed me to develop a wide range of legal skills and experience which puts me in good stead to begin my career as a Solicitor with the Firm.” Hannah Ghafari, newly qualified Solicitor.

Helen Taylor TEP, Training Principal and Partner at Franklins Solicitors LLP says “We believe in developing our staff to fulfil their potential for their own benefit as well as ours. Our training programme has been developed over a number of years and we see it as an investment well made. Despite all the current challenges, we have been able to grow our Business Services division offering a range of corporate and commercial services and we are delighted that Hannah has chosen to accept a permanent position within the firm. We are confident she will have an amazing career with us and warmly welcome her to the team.”

Franklins’ Partner and Head of Business Services, Andrea Smith praised Hannah saying “Hannah has really demonstrated an ability to adapt during challenging circumstances with a substantial part of her training being during the pandemic. She has a strong commitment to the first class delivery of client services with a strong work ethic, attention to detail and acute capability to quickly understand a client’s concern and issues. She really is a great asset to the team and I am pleased that she has accepted a position within our growing Commercial Property Team.”

Franklins would like to wish Hannah continued success in her role as a newly qualified Solicitor as she continues her legal career with us.

Selling your business is never easy, but selling during the pandemic is another ballgame altogether!

Switch Consulting was established in 2008 and Martin Wells and Alex Foxell toiled over 10 years to develop the company into the successful recruitment agency that it is, with offices in London, Birmingham and Manchester. Specialising in the retail, leisure and hospitality industries they faced challenges, as we all did, in the early months of this year. However, with a strong trading history behind them Alex and Martin nevertheless secured a buyer and successfully completed on their sale in the summer amidst the pandemic.

Leading the sale Holly Threlfall, Associate Partner & Corporate Solicitor at Franklins, says “It was a pleasure to work alongside Martin and Alex in their sale. Guiding them through the disclosure and due diligence process and advising them on the Share Purchase Agreement may have been a little different this summer, but ultimately we were still able to successfully navigate the sales process keeping our clients’ interests at heart.”

Pleased with the transaction, seller Alex Foxell says “Holly and her team were superb from the very start of the process through to post-sale. Great rapid and responsive communication that was also very flexible. Solid and wise counsel and advice that guided and supported us through the sale process. This was particularly impressive given the need for everything to be conducted remotely. Overall the quality was very good and I’m very happy to highly recommend Holly and the team.”

Franklins would like to congratulate all the parties involved on a successful transaction and wish them the best of luck in the future.

For further information on our wide range of Business Services, contact the team on 01908 660966 / 01604 828282 or email BusinessServices@franklins-sols.co.uk. 

I often get asked what the benefits are of a share sale over an asset sale. The truth is, there are pros and cons to each structure and you need to ensure whatever route you take is the right one for you. However, I have outlined a few key factors to consider below:

In an asset sale:

1. The buyer ‘cherry pick’s the assets they need to run the business. This can include real property, physical assets and equipment, specific contracts, intellectual property, branding and goodwill. Any real property transferred would be subject to stamp duty at applicable rates.
2. The seller usually retains liabilities (unless otherwise agreed) and still needs to discharge these. This includes any tax liabilities due to HMRC.
3. If the seller is your company, the company is the contracting party and your liability is limited as an individual (unless you give a personal guarantee)
4. Employees are required to transfer to the buyer’s employment under regulations commonly known as ‘TUPE’.
5. Other contracts will need to be individually assigned or new contracts (such as insurance) taken out by the buyer. Customers and suppliers therefore will need to be notified and this can interrupt the continuity of business.

In a share sale:

1. The ownership of the company changes, not the ownership of its assets. Your company continues to own all of its assets.
2. Contracts with the company remain in place. This can preserve continuity of business, as usually there is no need for assignments or new contracts to be entered into. The employees also continue to be engaged by the Company without the need to apply the TUPE regulations.
3. Just as assets remain in place, all liabilities also remain in place and the buyer indirectly assumes these. This is why due diligence on a share sale needs to be particularly thorough.
4. Provided you qualify and the transaction is properly structured, the proceeds of sale are subject to capital gains tax rather than income tax. This means you may also qualify for Entrepreneurs Relief which can have a substantial impact on reducing your tax liability.
5. A buyer is required to pay stamp duty on the transaction, this would be at a rate of 0.5% (rounded up to the nearest £5.00).

For further information in relation to a business sale, contact Holly Threlfall and the Corporate team on 01908 660966 / 01604 828282 or email Corporate@franklins-sols.co.uk.

1. Preparation – as with anything else in life, preparing your business for sale is key. From preparing for the due diligence process to planning the sale structure and your exit plan, this is fundamental to maximise on your sale and prevent your buyer from chipping away at your purchase price.
2. Value your business and find a Buyer – A Corporate Finance Advisor can assist you with this process and finding the right buyer and structure for your deal. You should ensure that you have in place a comprehensive Non-Disclosure Agreement to protect your company’s information and know-how. Once you have found a buyer and agreed a purchase price and structure in principle, this should be documented in the Heads of Terms. These are largely non-legally binding but it is important to make sure the headline terms are agreed to prevent any protracted negotiations on your deal.
3. Due Diligence Enquiries ­– Your buyer will raise a series of questions about your business, its assets and historic trading position. It is important to answer these honestly and carefully to ensure that you are not exposed whilst ensuring the Buyer has sufficiently detailed information to assess the purchase. We can assist you with this process through management of a data room for you to provide your responses through.
4. Legal Documents – Your transaction will contain a series of legal documents from your sales contract (which may take the form of a Share Purchase Agreement or Business Sale Agreement depending on your structure) through to a Disclosure Letter and ancillary documents required to effect your transaction itself. These need to be carefully drafted and negotiated to ensure that you know what you are signing up to.
5. Completion – This is where all of your hard work pays off! Exchange and Completion is often simultaneous in these deals, so the point where you are legally bound is also the point where you hand over the keys to your business. Of course, in most transaction you usually receive the proceeds of sale (or part of it) and you can begin planning your next endeavours!

For all enquiries relating to the sale or purchase of a business, contact our expert Corporate team on 01604 828282 / 01908 660966 or email Corporate@franklins-sols.co.uk.

Franklins Solicitors LLP are pleased to announce that Rebekah Hobbs has qualified as a Solicitor, following the completion of her training contract with the Firm.

Rebekah joined Franklins as a Paralegal in 2017, after having attained her Law Degree at Nottingham Trent University. Rebekah also completed her LPC LLM at The University of Law while undertaking her training contact. Rebekah has obtained a huge amount of experience during her training contract with the Firm having undertaken seats in Corporate Services and Commercial Services. As a qualified Solicitor Rebekah has accepted a permanent role within the Firm’s Business Services team, based at the Milton Keynes office.

“Undertaking my training contract with Franklins over the past two years has given me the opportunity to develop a range of Commercial Law experience. Working closely with the Corporate and Commercial Partners has allowed me to gain an insightful understanding of the law which will enable me to grow as a newly qualified Solicitor. Whilst it has not been without its challenges, the support and guidance of the team has made it an enjoyable and rewarding experience and I am very much looking for to furthering my career with the firm.” Rebekah Hobbs, newly qualified Solicitor.

Helen Taylor TEP, Training Principal and Partner at Franklins Solicitors LLP says “We believe in developing our staff to fulfil their potential for their own benefit as well as ours. Our training programme has been developed over a number of years and we see it as an investment well made. Despite all the current challenges, we have been able to grow our Business Services division offering a range of corporate and commercial services and we are delighted that Rebekah has chosen to accept a permanent position within the firm. We are confident she will have an amazing career with us and warmly welcome her to the team.”

Franklins’ Partner and Head of Business Services, Andrea Smith praised Rebekah saying “Rebekah has a strong and diligent work ethic and always ensures that the interests of the client are central to the advice being given. The Firm is very excited about Rebekah’s future at Franklins and she will be a great addition to the Corporate and Commercial Team.”

Franklins would like to wish Rebekah continued success in her role as a newly qualified Solicitor as she continues her legal career with us.

Tell us about your business and what you do.

Innova Technology Services Limited is a technology service provider. We deliver infrastructure and desktop support, consultancy, cloud services, software licensing, hardware procurement and compliance solutions. We have a proactive attitude to the services we provide and foster long term Trusted relationships with our customers. We provide dedicated account management, regular service review, recommendations and advice, all as part of the service.

What challenges are you/your customers currently facing following the COVID-19 pandemic?

For Innova the main challenge was to continue to deliver our services to the same standard in the lockdown. For our customers the challenge was to enable employees to continue working and communicating effectively while in lockdown. We also need to be mindful of the effect on cashflow and budgets for ourselves and our customers and help where we can with financial challenges.

How are these challenges being overcome?

We had a disaster recovery process in place in case we had a significant issue. We were able to implement this quickly and effectively with no impact on customers.

For the customers it meant implementing or improving the remote working technologies and training staff who would not normally work remotely on how to use them. The key goal was to maintain effective communication and access to data for the customer. Video conferencing technologies have come to the fore and entered daily life both for work and play.

We maintain regular contact with our customers to capture any issues quickly and effectively.

Working with customers and discussing payment terms where necessary.

What difficulties do you foresee coming out of lockdown and what support would help?

During the lockdown we have only delivered remote services. The challenge will be to build up our onsite services with customers and maintain resourcing capabilities.

We have customers across many business areas so it is difficult to gauge what coming out of lockdown will look like. The difficulties for leisure industries will probably be significant for some time and we will have to work closely with them to help as much as we can. It may be some customers buy into remote working moving forward, in which case we will help them refine their technical capabilities accordingly.

What message would you pass onto others?

Stay safe. Be careful in how we ramp up to whatever ‘normal’ is after the virus. Work together, it is to everyone’s benefit that companies survive and the country gets on with recovery together.

Jim Captainino, Director at Innova Technology Services | Telephone: 0203 474 5445 | Email: sales@innovauk.com

Tell us about your business and what you do.

SMS commercial cleaning has been proudly working in the private sector for 20+ years providing contract cleaning, high level specialist cleaning and we have a specialist team that specialises in all methods of disease control.

What challenges are you/your customers currently facing following the COVID-19 pandemic?

SMS cleaning recently featured on BBC News. We as a company recognise, as do many, the support and confidence people need to have to get back into the workplace; in particular the Disease Control Program as a solution to help UK businesses get back to work. Speaking to Hazel Scanlon, Director at SMS cleaning, the TV report demonstrated the steps taken which help support employers and employees in building confidence to get back into the workplace and help promote lowering the risk.

How are these challenges being overcome?

With movement restrictions being lifted, the BBC also discussed the safety processes firms are using to prepare their workplaces. Hazel Scanlon, Director at SMS cleaning, explained how premises are fogged with antiviral products which help to eliminate the virus in the air and on surfaces, this method is the best method to cover all areas of your building to give additional protection and to safeguard staff in their working environment. Additional precautions can also be taken. SMS cleaning can erect sneeze screens, provide facemasks, sanitiser stations and signage for extra protection.

What difficulties do you foresee coming out of lockdown and what support would help?

We need to be mindful that staff members are worried for their families, friends, colleagues and members of the public and that our priority as individuals is to avoid further spread of the virus and taking the necessary measures to lower the risk. We must focus on building our staff’s confidence and assuring them that their work environment is a safe place to work.

Any UK organisation can sign up to the free COVID-19 Health Assessment app and use this tool as part of their strategy to return to the workplace. SMS cleaning can support businesses with signing up to the app. The Disease Control Program is crucial for organisations who have staff who are unable to work from home and are emerging from lockdown.

What message would you pass onto others?

SMS cleaning are already using the Health Assessment app to help keep the SMS workforce safe during their front-line activities. The app allows SMS to see what percentage of their workforce each day is fit and well and who needs support. We are aware, as responsible employers, that our staff safety is paramount as are a number of the sites we are responsible for. We must work together to find solutions to keep our families, friends, colleagues and our nation safe.

Hazel Scanlon, Director at Support Maintenance Services Ltd (SMS Ltd) | T: 01908 319494 | E: info@smscleaning.co.uk

Companies House is the United Kingdom’s register of companies that all Directors and Shareholders should be familiar with. It is essentially an online tool akin to a treasure trove of information for corporate clients and solicitors alike. COVID-19 has however undoubtedly disturbed the running of this well-oiled Government machine, meaning that new measures have been put in place to overcome these unprecedented difficulties. This Article is intended to make you aware of some of these important changes.

Office Access & Filings

With social distancing measures in place, as well as reduced staffing levels, Companies House have closed their telephone contact centre, as well as their offices in Belfast, Edinburgh and London. You can however still email them at enquiries@companieshouse.gov.uk, send them documents by post to their London office, deliver paper documents to the Belfast / Edinburgh office or visit them at their Cardiff office, which according to their website is open 24 hours a day. Same day services are also currently suspended and you should expect delays in relation to the processing of paper documents. It is much more efficient to file documents online instead using WebFiling.

An interim emergency service has been created at https://beta.companieshouse.gov.uk/efs-submission/start which enables paperless filing in relation to filing a registrar’s powers document. This would normally be sent in paper format.

Filing Accounts

All private limited and public companies must file their accounts at Companies House, along with unlimited companies in certain circumstances. This is a statutory duty imposed by the Companies Act 2006. The failure to deliver accounts on time is a criminal offence that also carries a civil penalty. This can reach up to £1,500.00 for private companies and up to £7,500.00 for public companies. From the 25^th March 2020, businesses have been able to apply for a 3-month extension for filing their accounts. If the reason that you are requesting an extension relates to COVID-19 then it will automatically be granted.

Nonetheless, it is important to note that the Companies House website specifically states that companies which have already extended their filing deadline, or shortened their accounting reference period, may not be eligible for an extension. Also, if your accounts are filed late the penalty will be automatically imposed and the registrar has a very limited discretion to not collect it.

Strike Off

Under section 1000 of the Companies Act 2006, if the registrar has reasonable cause to believe that a company is not carrying on business or in operation, they may start the statutory procedure for striking its name off the register and subsequent dissolution. This could typically come about due to a failure to submit an annual confirmation statement or accounts on time.  Companies House have now paused the strike off process to prevent companies from being dissolved. This gives company Directors time to deal with the administrative side of their statutory duties.

Annual General Meetings

Under section 336 of the Companies Act 2006, public companies and private companies (if they are traded companies) are obliged to hold an Annual General Meeting within either 6 or 9 months of their accounting reference date. The Government announced that it will be introducing legislation to ensure that companies whose AGM date is fast approaching are able to do so safely and flexibly, such as conducting this online. Please however note that the requirements of a valid general meeting, such as quorum, which are detailed in a company’s articles of association are still applicable.

Pay Stamp Duty

A Stock Transfer Form is, as the name suggests, used to transfer shares from one person to another. You must no longer post stock transfer forms to HMRC and you should email them instead to stampdutymailbox@hmrc.gov.uk. E-signature will be accepted while COVID-19 measures are in place. To pay the stamp duty owed you must now pay electronically by Faster Payment, Bacs or Chaps. Cheques will not be accepted. You must then email HMRC with the details of the transaction. Further guidance can be found here.

If you would like further information on Companies House filing requirements, please contact Andrea Smith and the Business Services team on 01604 828282 / 01908 660966 or email andrea.smith@franklins-sols.co.uk.

Tell us about your business and what you do.

My business is imaginatively titled “O’Sullivan Financial Planning”. We help individuals and business owners make informed decisions around their financial plans to achieve and maintain the lifestyle they desire.

What challenges are you/your customers currently facing following the COVID-19 pandemic?

My wife works for the NHS and her role is significantly more important than mine! As a result, I am spending most of the time looking after our 6 and 3-year-old children.

Despite the recent stock market falls my clients are not too concerned about this. They all have sufficient cash reserves that they can afford to leave their money invested for the long term and although short-term price movements are disappointing they are not too much of a concern for them achieving their long term plans.

How are these challenges being overcome?

For myself I’ve had to learn to juggle! I’ve changed my working pattern to a massively condensed working week. All my meetings are on a Monday or Tuesday and I fit work around everything else during the rest of the week – I’m writing this as I cook dinner!

For my clients I had been managing expectations for some time that markets will drop. I had no crystal ball and couldn’t predict COVID-19 but the longest bull market in history was always going to end at some point so I had been talking about this for a while. Having managed their expectations going into this, I have tried to be in much more regular contact than usual with them to ensure that any questions they have are answered and provide reassurance as needed.

I already had a fully functioning remote office, so apart from getting more comfortable with video calling, I am still able go service my clients in the same way I always have. In anything, I’m using a lot less paper, so I’ve probably saved a couple of trees.

What difficulties do you foresee coming out of lockdown and what support would help?

Life won’t return to normal for some time. There will be a second wave, and the more the curve can be flattened to try and prolong when this will happen the better prepared our health service will be and hopefully, we will be much closer to a vaccine at that time.

In my opinion the on-off switch what is furlough won’t help many businesses as they try to open their doors again. I think a scheme similar to Germany or Ireland where it’s not so much the individual which is furloughed but maybe a portion of their hours would massively help businesses start operating again and give individuals the ability to return to work.

I’d like to see the schools begin to open sooner rather than later (not just for my personal sanity) as the economy is losing a lot of productivity with parents balancing childcare. Our schools will need support as this will be a much harder task to deliver.

What message would you pass onto others?

We shouldn’t underestimate human ingenuity. This too shall pass.

Conor O’Sullivan, FPFS, Chartered Financial Planner Director & Independent Financial Adviser at O’Sullivan Financial Planning | T: 01536 639 007 | E: conor@osullivanfp.co.uk