Tips for directors – business expansion

Are you considering taking your business to the next level? Below you will find important issues to consider if you are planning to expand your company’s operations by acquiring the whole or part of another company, forming a joint venture or a partnership, or merge.

Why do you want to expand?
Establish the reasons behind your company’s expansion and the benefits which the process should bring. This will help you with making decisions in the next steps. For example, is it to take over particular clients you have always wanted or maybe you wish to become a market leader? Is your aim to increase the value of your business for the future sell-off? Perhaps you want to gain the necessary knowledge valued in your sector or change your company’s core capabilities? Or maybe to gain intellectual property rights to a product?

Market research
Do a proper market research. Check what companies are currently operating in the areas of your interest. Get as much information about them as possible, including their clients, employees, organisational culture and plans for the future.

Strategic fit
Out of the prospect companies select the ones which best fit to your organisation’s culture, strategic goals, products and services so that the whole transition process is as quick and smooth as possible and brings the expected growth of your business.

What is the best option for expansion?
Based on your selection of possible target companies, establish how you can get them work for you. Is it by acquisition, merger, joint venture or other form of business expansion?

Calculate all the costs involved
Work out how much money you will need to secure the transaction and how much it will cost you to implement all the necessary changes into your new business. Consider also employment costs as you might have to make some of your existing and new employees redundant, or appoint or promote them. Do benefits exceed the cost?

Proper document preparation
This will often require appointing an outsourced commercial law specialist who will prepare the transactional documents and ensure that the process is legally valid and compliant with the regulations.

Employees’ contracts
Depending on the method of expansion which you have chosen and terms and conditions agreed in the transactional documents, you might be obliged to provide your existing and new employees with new or amended contracts of employment. Again, they should be prepared by someone who has relevant HR experience.

We can manage the legal aspects of your business expansion. Just give us a call and advise what sort of assistance you would require.

The right to request time to train

The new right for employees to request time off work to get a professional qualification or a training which they believe will improve their performance and productivity will come into effect on 6 April 2010. Only employees who have worked at least 26 weeks in a business employing 250 people or more will have this privilege in 2010. The remaining group will gain this right in April 2011.

Implications for employers
Employers will not be required to pay for the training but they will be obliged to seriously consider their employee’s request and respond to this request in a ‘reasonable time period’. If they have a sound business reason to decline the request, they will be able to do so. There might however be alternative solutions to accommodate the time to train request, for example a flexible working time.

More information on the new right to request time to train will be available in January 2010.

Help with new annual returns for residential managing agents

Following the introduction of the new Companies House forms, both manual and online, we have received a number of queries and comments from managing agents who are dealing with the company secretarial side for their flat management clients. Of particular concern seems to be the new Annual Return (the AR01, formerly the 363).

If you are struggling to come to grips with these, let us help you with filing your client's annual return in the new format. Our fee for web-filing the new AR01 is £150 plus VAT, which is based on the information we receive from you and our examination of the memorandum and articles to deal with the question on voting rights. Please contact us for more details.