London Registrars blog

Tougher penalties for misuse of personal data

noreply@blogger.com (London Registrars) — Mon, 04 Jan 2010 11:09:00 +0000

The Ministry of Justice is proposing to toughen the current maximum penalty fines to include a prison sentence for those found guilty of knowing or reckless misuse of personal data. Currently the maximum penalty is £5000 in Magistrates' Courts and an unlimited fine in the Crown Court. These are to be changed to: two years imprisonment for cases heard in the Crown Court and 12 months imprisonment for cases heard in a Magistrates' Court. The courts will also be able to impose community sentences and fines. The results of the public consultation will be known after 7 January 2010.

To register under the DPA and to provide your staff with guidance how to lawfully manage personal data, please visit the Data Protection Act section on our website.

Tips for directors – business expansion

noreply@blogger.com (London Registrars) — Wed, 25 Nov 2009 14:12:00 +0000

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

noreply@blogger.com (London Registrars) — Thu, 19 Nov 2009 11:59:00 +0000

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

noreply@blogger.com (London Registrars) — Thu, 12 Nov 2009 12:15:00 +0000

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.

Company’s addresses

noreply@blogger.com (London Registrars) — Thu, 15 Oct 2009 16:29:00 +0000

With the new legislation effective from October 2009 many new and existing entrepreneurs might be confused as to how many and what kind of addresses their company should maintain. This article explains what addresses a company may use and which ones are legally required.

Registered office address
Every company is required by law to have an address where official correspondence, such as documents from a court, letters from HM Revenue & Customs or from Companies House, can be served. This is a registered office address which must be provided when registering a limited company or an LLP in the UK.

The registered office must be a valid address and recognised by the Post Office. It is not permitted to use a PO Box as the registered office address. All changes to the address must be reported at Companies House immediately.

The registered office address is available for the general public to view on the Companies House website. Companies must also state their registered address on their stationary, invoices, websites and financial documents. The company’s name must also be displayed at its registered office.

For reputational purposes, efficiency in dealing with official correspondence and to protect the privacy of business owners trading from home, companies often use a third party address as their registered office address.

Business address (trading address)
This is the address where the company’s business operations are carried out and where the company’s assets, such as premises and machinery, are located. The business address may or may not be the same as the registered office address and therefore may not be in the public domain.

Many company directors trading from home choose a third party address for their business use and mail forwarding in order to protect their privacy or to add prestige to their business.

Directors’ usual residential address
This is the director’s home address and must be provided when registering the company. For companies incorporated after 1 October 2009 this address is not shown on the public record.

Directors’ service address
From 1 October 2009 new rules regarding directors’ addresses came into effect. Directors of companies incorporated after this date are no longer required to disclose their residential address to the public. They can use a service address instead.

The service address must be where documents can be delivered and an acknowledgement or receipt can be provided if required, so it cannot be a PO Box or a DX number. A directors’ service address may be the same as the company’s registered office address, but equally, he or she may choose an altogether different address for this purpose.

The reasons for this change in the law are twofold: firstly to protect against identity theft and secondly in response to a criticism that the current system does not adequately protect directors from harassment.

Directors who are on the register before 1 October 2009 will automatically have their residential address shown as their service address, unless the appropriate form is filed with Companies House notifying a different directors’ service address. However, a directors’ residential address shown on historical documents will remain available to the public. If they believe that having their home addresses publically available will lead to a ‘serious risk’ to themselves or their families, they can apply to have this information made private.

The only time when the residential address can be disclosed after 1 October 2009 is if certain public bodies such as the police, HMRC or credit reference agencies demand it. Also, if correspondence remains unanswered for a specified time, and it becomes apparent that the service address is not a suitable place to serve documents, the enquirer can ask the Registrar of Companies for the residential address to be put on the public register.

Secretary’s service address
The appointment of a company secretary is optional for private companies. However, if appointed, the secretary’s service address (but no longer their residential address) must be provided when registering the appointment. Public companies are required to appoint at least one company secretary.

Single Alternative Inspection Location (SAIL) address
The new Companies Act introduced a new requirement for UK businesses effective from 1 October 2009 that a company’s statutory books (including its register of directors and members) must be kept together and must be made available for inspection, either at its registered office or at a Single Alternative Inspection Location (SAIL) address.

Notifications made to Companies house before 1 October 2009 that a company’s registers are held at a location other than its registered office are no longer valid and therefore directors or their company secretaries should file a new SAIL address at Companies House. Only one SAIL address is permitted.

Conclusion
The new law provides alternative solutions for company owners and directors who do not wish to disclose their residential and business addresses to the public. They can enjoy a wider choice and select a combination of addresses which best suits them and their business.

New articles of association

noreply@blogger.com (London Registrars) — Mon, 12 Oct 2009 15:47:00 +0000

The new form of articles of association for private companies limited by shares was introduced on 1 October 2009 as a key change in company law. Directors and shareholders of companies formed after that date will be able to take advantage of the simplified procedures for running their business as set out in the new Model Articles.

There is no legal requirement for a company established before 1 October 2009 to change its articles, but its existing articles of association are unlikely to incorporate the new procedures. Consequently, directors and shareholders may be uncertain about the extent of their powers and thus increase the risk of a potential breach of the new legislation. We therefore recommend that you amend your company’s articles to be able to take advantage of the recent changes to company law.

For a special price of £75 plus VAT, we will help you adopt the Model Articles for your limited company and enable the company to take advantage of the new provisions of which, we believe, the following will be most relevant to you:

replace the difficult to understand language of the existing memorandum and articles with user-friendly and easily understood English
remove any limitation on the type of business the company can undertake
remove the upper limit on the company’s share capital and allow the directors to issue new shares without permission of the shareholders
make greater use of electronic communication with shareholders and hold electronic meetings, eg. by telephone, of the directors and of the shareholders
take advantage of the new provisions in the Companies Act 2006 relating to the pre-authorisation of directors’ conflicts of interest.

To take advantage of this limited time offer and ensure that your company’s governing documents are up to date, go to new articles of association service page and place your order now.

Single alternative inspection location (SAIL)

noreply@blogger.com (London Registrars) — Fri, 09 Oct 2009 16:05:00 +0000

From 1 October 2009, the new Companies Act introduces a requirement that a company’s statutory books (including its register of directors and members) must be kept either at its registered office or at a Single Alternative Inspection Location (SAIL) address, which must be located in the UK (Scottish companies will need a SAIL address in Scotland and similarly Northern Irish companies in Northern Ireland). A company’s registers must be made available for inspection at the SAIL.

Notifications made to Companies House before 1 October 2009 that a Company’s Registers are held at a location other than the Registered Office are no longer valid. With effect from 1 October 2009 all such records at Companies House have been amended and will show that the Company’s Registers are held at the Registered Office.

Hence, if your company’s registers are not maintained at the Registered Office, for example, your company secretarial function is outsourced to an external supplier or you use external share registrars to manage your Company’s Register of Shareholders, you will need to notify Companies House of your Company’s SAIL address as soon as possible after 1 October 2009.

Only one SAIL address is permitted, which means a company must ensure that all its registers are kept together, either at its registered office or at the SAIL and must not be split between the two.

London Registrars is able to provide its central London address as a SAIL for public and private companies alongside registered office address and directors’ service address for all types of companies. Please go to our single alternative inspection location page for more details.

Registering a new business

noreply@blogger.com (London Registrars) — Fri, 25 Sep 2009 14:26:00 +0000

There are on average 1500 companies registered every day in the UK. This article will explain what kinds of companies are available for registration and how the incorporation process works.

Types of companies

The choice of a company depends on a few factors such as: the company’s purpose, the budget, attitude of partners or directors towards their liability, profession of those forming the company and their approach towards the obligation to comply with different legal requirements imposed on different company types.

Private company limited by shares
The majority of small companies registered in the UK are companies limited by shares. This is due to the relatively simple formation process and the fact that such companies are designed to make a profit which can then be retained in the company or distributed to its shareholders as dividends.

By statute, such companies must have at least one director who must be an individual aged 16 or over. The company’s shareholders’ liability to creditors is limited to the value of the capital originally invested in the company by purchase of its shares (i.e. the nominal value of shares and any premium paid in addition). Thanks to their ‘limited’ status, shareholders’ personal assets beyond their original investment are protected, for example, in the event of insolvency.

Shares of a private limited company may not be offered to the general public.

Private company limited by guarantee
This type of company is primarily used by non-profit organisations such as clubs, membership organisations, associations, statutory bodies such as ALMOs or workers co-operatives. The liability of the members is limited to the amount of money they have promised to pay to the organisation as a guarantee in case the company is wound up while they are a member or within one year of their ceasing to be a member. The amount that is guaranteed can be as little as £1.

Members of a company limited by guarantee do not own the company and cannot participate in the distribution of the company’s profits through dividends, nor do they have any claim upon the assets of the firm. However, where members are directors, they have a right to decide about the firm’s future.

Public limited company
Such companies have a share capital of at least £50,000 (or €65,600) in value and the liability of each member is limited to the par value of shares a member holds. At least two members, two directors and one company secretary must be nominated. The directors can also be the company’s members and/or its company secretaries. At least one of the directors must be a natural person aged 16 and over.

Registering a PLC entails many benefits as well as more stringent capitalisation and governance requirements. Public limited companies have access to capital markets and may offer their shares to the general public. Listed PLCs are subject to strict regulations and must follow certain procedures designed to prevent fraudulent activities, such as adherence to the Combined Code, the Listing Rules or the AIM Rules.

Limited liability partnership
LLPs are often chosen by professionals such as lawyers, doctors, accountants or architects who wish to form a company with one or more partners and protect individual assets from the legal consequences of becoming insolvent. Members of a limited liability partnership have a joint responsibility for the claims made against the firm however only to the amount agreed in the LLP agreement (which usually is the sum of the capital each of them contributed to the company).

Community Interest Company
This is a type of limited liability company ideal for those who want to conduct a business or other activity for the benefit of a community. Charities, political parties, political campaigning organisations or companies cannot become a CIC.

A CIC has greater flexibility in terms of activities than a charity. There are no trustees or trustee control, and directors of Community Interest Companies can receive remuneration. CICs enjoy lighter regulation and administration and fewer reporting requirements than charities. A CIC limited by shares can become a public company and be quoted on the stock exchange in the future.

Community Interest Companies, however, must give transparency of their operations. They are monitored by the CIC Regulator who also has an enforcement role in order to ensure that the CIC’s activities serve the community purpose for which they have been set up.

Right to manage company (RTM)
This form of company allows leaseholders to take control over the management of their building and is open to the majority of owners of private leasehold flats. Lessees can appoint a management company for their building. In order to be able to form a RTM, at least 50% of flat owners must declare their willingness to do so, 2/3 of them must have long leases at time of issue, and less than 25% of the building’s floor area must be commercial.

Single director company
This is a private company, limited by shares, which is incorporated with one shareholder or whose membership is reduced to one person. Single director companies are ideal for those entrepreneurs who wish to keep decisions and quality of work under their control and are commonly used by freelancers, self-employed or home-based business owners.

Registering a company

Once the decision has been made regarding the type of company to be registered, the incorporation process can start.

Most future business owners, due to lack of time or knowledge, choose a formation agent to register their company. The agent prepares all the incorporation forms and sends them together with the relevant fees to Companies House. The agent can also assist in the preparation of the Articles of Association and the Statement of Capital and Initial Shareholdings (in the case of private companies limited by shares) or the Statement of Guarantee (in the case of companies limited by guarantee).

Parties wishing to register their business on or after 1 October 2009 will have to provide the following information to the Registrar: names of directors/members, their residential and service addresses, the company’s proposed registered office address and the name and address of the company secretary (where applicable).

To incorporate a limited company, a new Form IN01, the Articles of Association and the Statement of Capital, together with the correct fee, must be filed. At the moment the paper incorporation fee is £20, electronic incorporation £15, same day paper incorporation £50[1].

Some types of companies require more complicated registration processes. For example, an application to form a Community Interest Company must be first approved by the CIC Regulator before it can be filed at Companies House.

More information on the new Articles of Association and Statement of Capital and Initial Shareholdings can be found in the article ‘Companies Act 2006 – impact on company’s constitutional documents’.

Conclusion

Registering a new company is an easy and straightforward process when done with the help of a professional incorporation agent. There are many firms offering cheap and quick formation services but the level of support that can be expected from them is often minimal or non-existing. It is therefore recommended to spend some time researching a trustworthy and professional incorporation agent.

[1] www.companieshouse.gov.uk, 8.09.2009

Companies Act 2006 – more changes taking place on 1 October 2009

noreply@blogger.com (London Registrars) — Wed, 23 Sep 2009 16:12:00 +0000

The provisions of the Companies Act 2006 have been brought into force in stages and the remaining changes will come into force on 1 October 2009.

Changes to the Memorandum & Articles of Association have been described in our previous article ‘Companies Act 2006 – impact on company’s constitutional documents’. The remaining new provisions are as follows:

Register of directors and secretaries

From 1 October companies will be required to maintain two separate registers of directors’ addresses. The newly introduced ‘register of directors’ need not show a director’s usual residential address but will instead show a service address, eg. the company’s registered office, the director’s home address or any other address at which legal documents and official notices may be served on the director. This register will be available for public inspection.

The ‘register of directors’ home addresses’ will be kept separately from the register of service addresses and will only be disclosed to some public authorities and credit reference agencies. Directors who feel they are at risk of intimidation or violence are able to apply to the Registrar to prevent their home addresses from being disclosed to credit reference agencies.

Authorised share capital

Companies incorporated after 1 October 2009 will no longer have authorised share capital, but must complete a ‘statement of capital and initial shareholdings’ as part of the incorporation process. The statement of capital gives details of a limited company’s issued share capital at a particular time. A different statement is required for companies limited by guarantee, which do not have a share capital.

Company’s capacity and related matters

From 1 October 2009 it will not be possible to call into question the validity of an act done by a company on grounds of lack of capacity in the company’s articles, and a person dealing with the company will not be bound to check on the powers of the directors to bind the company.

Public inspection of register of members

A person wanting to inspect the company’s register of members will have to give reasons, and access can be refused if the company can persuade a court that the request is not being made for a ‘proper purpose’.

Additional paternity leave

noreply@blogger.com (London Registrars) — Wed, 16 Sep 2009 15:10:00 +0000

The Government is planning to introduce additional paternity leave to the one currently available by April 2010. If the changes are implemented, parents of children born on or after 3 April 2011 will be able to transfer the last six months of the maternity leave to the father, with three months paid at the same rate as Statutory Maternity Pay.

Existing parental rights will not be affected by the new paternity leave. Currently, employed fathers can take two weeks paid paternity leave. Mothers are entitled to 52 weeks maternity leave with the first 39 weeks paid at the Statutory Maternity Pay rate. Employed parents can take up to 13 weeks in total unpaid parental leave until the child is five years old. Flexible working hours are available for parents of children aged 16 and under.

Charities Act 2006 and independent schools - an uneasy relationship

noreply@blogger.com (London Registrars) — Fri, 11 Sep 2009 08:26:00 +0000

Prior to the enforcement of the Charities Act 2006 it was generally, and legally, taken as a given that independent schools provided public benefit. This has meant that these institutions enjoyed a number of tax exemptions and reliefs due to their charitable status. With the introduction of the Act, however, independent schools will now have to prove that they are for the public benefit, with scrutiny and enforcement coming courtesy of the Charity Commission. Read more about the changes to the Charities Act.

New Companies Act 2006 – impact on company’s constitutional documents

noreply@blogger.com (London Registrars) — Thu, 20 Aug 2009 14:12:00 +0000

From 1 October 2009 companies should be anticipating significant changes to their administration and management as new provisions contained in the Companies Act 2006 come into force. One of the areas which will require a professional review and possible amendments is the company’s Memorandum and Articles of Association.

Click here to read the article which explains the main alterations and steps which need to be taken to comply with the 2006 Act in respect of the Memorandum and Articles.

Process agent

noreply@blogger.com (London Registrars) — Tue, 18 Aug 2009 13:42:00 +0000

Under English court procedure rules, it is necessary to serve papers to start proceedings correctly. If a party does not have an address within England, the process for serving these papers abroad is lengthy and complicated. It is therefore customary – and often required by the UK entity supplying the service or loan – for the overseas entity to appoint a UK process agent and agree that service at the address of the process agent will constitute proper service for the purposes of the court procedural requirements.

Who is a process agent?

A process agent, also known as a service agent, agent for service of process, registered agent, registered agent for service of process or resident agent, is a business which accepts service of notices, proceedings or documents on behalf of its overseas clients in situations where, usually because of contractual obligations, it is not possible for them to be served abroad.

When is the service of a process agent required?

The role of a process agent is vital for many overseas businesses dealing with suppliers or tenders in the UK. A typical situation requiring the appointment of a process agent is where an overseas entity raises a loan from a UK financial institution. The lending bank will require the appointment of a UK based process agent to receive formal notices should the borrower default on the loan.

A process agent can also act in a broader capacity for the appointing company, including acting as a process agent for receiving documents in connection with arbitration proceedings and receiving notices under contracts where an independent party is needed.

What criteria should be taken into consideration when appointing a process agent?

Often agreements which require a process agent are long-term arrangements. The appointors should assess the competency and reliability of available process agencies in terms of their market presence, level of risk involved (i.e. probability of the provider staying in business), experience in providing the service as well as their efficiency in responding to customer enquiries and evidence of delivering a high quality service, such as ISO accreditations.

By doing so, the appointor can ensure that it complies with all its contractual obligations, and that its interests are being represented in the UK to a high standard.

How best to resolve workplace disputes - tips for employers

noreply@blogger.com (London Registrars) — Mon, 10 Aug 2009 08:29:00 +0000

Faced with an employee raising a grievance? Here are some practical tips which should help you resolve the dispute at its early stage and stay on positive terms with your employee.

1. Face the problem now
Schedule a meeting with your employee as soon as a problem arises. Do not ignore it as you might not have another chance to resolve the dispute internally.

2. Do not let go of your emotions
During the meeting, be professional and focus on the case rather than on the person and what you feel or think about her or him. Establish facts of each case objectively. Showing empathy might also contribute to resolving the dispute successfully.

3. Allow the employee to be accompanied at the meeting
This is also one of the requirements listed in the amended Code of Practice on disciplinary and grievance procedures.

4. Listen
Treat your employee with respect and listen carefully to what he or she is saying. They might have a point and even indicate ways of improvements helping you avoid similar problems in future.

5. Mediate
Try to achieve a compromise with your employee. This might save you money on usually costly tribunal hearings.

6. Learn from the experience
This might have been a tough but a necessary lesson for your company and you as an employer. Try to draw conclusions from the whole experience. Maybe your internal procedures need reviewing? Do you provide your employees with employment packs containing procedures on dealing with workplace disputes and grievances?

If you wish to find out more about the amended Code of Practice, click here to read our article ‘Resolving workplace disputes’ or contact our team.

Registered office

noreply@blogger.com (London Registrars) — Tue, 28 Jul 2009 13:58:00 +0000

The registered office is a Company’s official address and all formal documents must be served there. If a company changes its registered office address the new address must be notified to Companies House. Below are a few key points to keep in mind:

1. Every company must have a registered office (Companies Act 1985 section 287 (1)).

2. The official registered office of a company must always have a notice outside the office stating the name of the company. Also, details of the registered office must be shown on all invoices, order forms, letterheads, websites and monetary documentation (Companies Act 2006).

3. The statutory books must be kept at the registered office including the Register of Members, the Register of Substantial Interests, the Register of Debenture holders and the Register of Charges. In some instances the registers can be kept at other addresses after formal notice has been given to Companies House.

4. For small businesses (or for young entrepreneurs working from home) it is important that prospective customers have the confidence to trade with them and have a high profile. To achieve this, many businesses secure a prestigious registered office address, often in central London.

Resolving workplace disputes - amended Code of Practice

noreply@blogger.com (London Registrars) — Fri, 17 Jul 2009 10:18:00 +0000

As of 6 April 2009 the government has reformed the processes of dealing with problems at work. These changes put less emphasis on the mechanics of how to manage disciplinary issues, grievances or dismissals and places the onus on flexibility to resolve problems at an early stage. The content of the Code is easy to grasp and straightforward. On handling disciplinary issues and dismissals it sets out the following steps for employers to follow:

· establish the facts of each case
· inform the employee of the problem
· hold a meeting with the employee to discuss the problem
· allow the employee to be accompanied at the meeting
· decide on appropriate action
· provide employees with an opportunity to appeal.

More information can be found in our article 'Resolving workplace disputes'.

Contracts of employment

noreply@blogger.com (London Registrars) — Thu, 16 Jul 2009 11:36:00 +0000

As a vast majority of businesses need employees in order to expand, company directors, sooner or later, have to face the prospect of recruiting people and familiarise themselves with employment law. Employment law, together with discrimination and data protection legislation all have major roles to play throughout the recruitment process.

Employment status

A person can be an employee or self-employed. Both have different legal, tax and National Insurance contribution implications and employers must be aware of these differences to know which category suits their business best. For example, a person can be classified as self-employed for tax purposes but as an employee for purposes of employment rights.

Contract of employment

Usually an employment is offered in a letter although it is not uncommon for it to be offered verbally. It is important that the letter is made subject to the company’s standard employment terms and conditions. However, once an employment starts, the employer is obliged to give the employee a written statement of particulars of employment no later than two months after the employee has started work. The statement sets out the terms that have been agreed between the employer and the employee, such as job title and description, starting date, place of work, salary, benefits, required hours of work, holiday and sickness entitlement, notice periods, grievance arrangements and disciplinary procedures. Often, employers include in the contracts of employments provisions for confidentiality, restrictive covenants and other provisions.

It is also common practice to provide new employees with the company’s Health and Safety Policy, Equal Opportunities Policy, Data Protection Policy and other important company documents together with, and referred to in, their employment contracts.

Contract to provide services

A contract to provide services is an agreement by which one person agrees to provide another with a service, but not necessarily undertaken by that person personally. A contract for services is typically used by a self employed person or between a temporary agency worker and the agency.

Directors as employees

A company directorship is an office and not an employment. However, the company can enter into a service contract with a director and then such a director would be an employee of the company. Where this is the case, the company must provide the director with an executive employment contract. It should be noted that the office of a director has different tax and National Insurance Contributions implications from that of an employee.

Conclusions

Contracts of employment exist to clarify both employment rights and obligations. They should detail benefits and entitlements due to the employee as well as set out what is expected from them.

It is a legal obligation in the UK for employers to provide employees with a contract of employment within two months of starting work. Despite their obligatory nature, employers should appreciate that they are hugely beneficial for a company. For example, they can be used as a mechanism to lock in highly skilled members of staff into a specific timeframe, by obliging them to offer a greater period of notice. Ultimately, employment contracts should not be perceived as another piece of paper work, but as a device to protect and strengthen a business.

Compromise agreements

noreply@blogger.com (London Registrars) — Fri, 03 Jul 2009 15:32:00 +0000

As a general rule, any provision in an agreement which excludes an employee’s right to start legal proceedings against their employer is unlawful. The employee, even after receiving the agreed compensation from the employer in full, may complain to an employment tribunal. The exception to this rule is where an employer and employee have entered into a compromise agreement, which fulfils statutory requirements.

What is a compromise agreement?

A compromise agreement is a formal and legally binding agreement made between an employer and an employee (or ex-employee as the case may be) under which an en employee agrees not to pursue any claims in relation to his or her employment or its termination in return for a financial settlement.

When is a compromise agreement used?

An employer may consider using a compromise agreement as an alternative to going through disciplinary or performance review or redundancy procedures with the employee concerned.

A compromise agreement may be used to resolve all existing disputes and possible future claims once and for all without the necessity of going through tribunal or court proceedings.

Compromise agreements may also be used to settle serious grievances raised by employees, such as constructive dismissal and unlawful discrimination claims.

What are the benefits of using a compromise agreement?

A compromise agreement would be appropriate where the employer desires to take an employee out of the workplace quickly, as it saves the employer going through time-consuming statutory procedures.

A compromise agreement will generally avoid the uncertain outcome of a tribunal or court hearing while at the same time shields the employer from potential unfavourable publicity.

Conclusion

A compromise agreement is a fast and straightforward way to achieve a mutually satisfactory settlement for both the employer and employee. A compromise agreement will also avoid the costs and uncertainty of legal action.

However, compromise agreements are complex legal documents which must fulfil a number of statutory requirements in order to be legally binding. Furthermore, an employee must receive independent legal advice from a ‘relevant independent adviser’ within the meaning of the legislation governing compromise agreements, before signing a compromise agreement. It is therefore recommend that the preparation and review of compromise agreements should always be carried out by experts.

Transfer of undertakings – employment contracts

noreply@blogger.com (London Registrars) — Thu, 02 Jul 2009 14:13:00 +0000

The process of transferring staff to a new employer as a result of a transfer of a business or undertaking, or a part of one is regulated by the Transfer of Undertakings (Protection of Employment) Regulations 2006, known as the TUPE Regulations. Its aim is to preserve the continuity of employment of those employees who are subject to the transfer.

The main prerequisite of the Regulations is that employees employed by the previous employer automatically become employees of the new employer when the transfer takes place. Terms and conditions included in their contracts of employment remain unchanged, with the exception of certain occupational pension rights. The new employer is obliged to take over all the contracts of employment of all permanent employees. The contracts cannot be terminated just as a result of the transfer.

The new employer also takes over all the rights and obligations arising from these employment contracts, including outstanding liabilities of the previous employer, such as breach of contract or sex discrimination which occurred before the transfer took place.

The Regulations describe circumstances when it is possible for the previous or new employer to vary terms and conditions of employment contracts. More information can be found on ACAS website.

The easiest way to ensure that your business complies with the Companies Acts

noreply@blogger.com (London Registrars) — Fri, 19 Jun 2009 09:55:00 +0000

For some business entrepreneurs the word ‘compliance’ causes shivers down their spine and a lot of headaches. ‘It’s such a time-consuming job and I have to focus on bringing new customers to the business! I cannot spend my time doing so much paperwork!’, they often shout in despair.

Directors of large organisations have a slightly different problem: ‘Is my company fully compliant with the latest laws? What if my financial director is too busy that he or she turns a blind eye to legal issues’, or, ‘Does business compliance cost me too much?’.

The problem is that every company, large or small, private or public, must comply with the Companies Acts and file relevant documents with Companies House by fixed deadlines. Failure to do so might result in financial penalties and possibly more serious legal consequences for the company.

So what’s the solution?

The easiest and usually most cost-effective way to ensure that your business complies with the law, and to enable the directors to concentrate on pursuing the company’s strategic aims, is to appoint an experienced company secretary to manage the compliance matters.

Outsourcing this function to company secretarial specialists brings further benefits, such as:

· time and money savings
· assurance that your compliance issues are dealt with by professionals who possess detailed knowledge and experience
· no more penalties or risks to your company’s reputation for late filing
· possibility to focus on the company’s core activities rather than its administration and legal issues.

What does a company secretary actually do?

A company secretary, known as a corporate secretary in the United States, is a senior role in a private or public organisation, responsible for company's compliance, governance and liaison with regulatory bodies, such as Companies House. A company secretary often acts as a chief administrative officer enabling the company directors to concentrate on core company functions and running the business.

Responsibilities of company secretaries vary depending on the size of the company and complexity of its operations. Typically, a company secretary in a private limited company:

· provides guidance to the board on the members’ requirements and obligations contained in company law
· maintains statutory registers, transfers shares and issues new certificates
· updates the company file with the Registrar of Companies within specified time limits
· ensures compliance with company law, commercial law, health and safety law, environmental law, employment law, etc
· liaises with shareholders, distributes notice of meetings and annual returns to them
· prepares legally required documentation and oversees legal matters. This requires company secretary to be familiar with commercial, employment and other laws.
· manages company and board meetings, compiles and distributes minutes
· files accounts and annual return within specified time limits
· carries out instructions of board
· acts as board and/or chairman’s confidante
· protects the company’s assets such as the statutory books, records of the company, confidentiality of the board’s work and other aspects of corporate security
· supervises the arrangements to allow shareholders and other parties to inspect certain records of the company and to provide access to statutory and other bodies to inspect other records
· for listed companies, liaises also with the Stock Exchange and ensures the requirements of the Listing Rules are complied with.

Conclusion

You will notice benefits of having a company secretary dedicated to managing your compliance matters really soon. Outsourced specialists will provide even more advantage to your business in the current hard times.

A big mistake of a big company?

noreply@blogger.com (London Registrars) — Thu, 18 Jun 2009 13:31:00 +0000

It is big news today that an Anglo-Australian mining company has decided to quit London-based law firms and recruited in-house lawyers in Delhi to work on drafting company contracts and reviewing documents, apparently saving a significant amount of money.

Before making such a big decision, the company could have considered alternative solutions such as using the services of a firm of experienced company secretaries, whose one of many responsibilities is contract and document review in accordance with legislation and statutory obligations. Some might not know, but company secretaries do a lot of legal work which isn’t classified as legal in standard terms. Their hourly rates are much lower than the lawyers’ rates, they know company law inside out and have the appropriate reference libraries available.

It might be well worth for companies in a similar situation to call us first and check what a company secretary can do for them.

New government business package

noreply@blogger.com (London Registrars) — Fri, 12 Jun 2009 10:50:00 +0000

A new publicly-funded package for companies with difficulties to access previous government financial schemes has been introduced via Business Link. The new schemes are designed to help companies with financial problems, insufficient money for research and development, training, exporting and other common business and sector issues.

Increase of the statutory redundancy payment

noreply@blogger.com (London Registrars) — Fri, 12 Jun 2009 10:33:00 +0000

The weekly limit of statutory redundancy payment is increasing from £350 to £380. The government’s decision has been announced in the 2009 budget and the limit is supposed to remain unchanged till February 2011.

Only employees with 2 or more years of service with the same employer are entitled to a redundancy payment from their employer.

Impact of the National Minimum Wage

noreply@blogger.com (London Registrars) — Thu, 11 Jun 2009 16:28:00 +0000

The government is planning to implement a new National Minimum wage policy on 1st October 2009. Today BIS has published final assessment of the impact the National Minimum Wage Regulations (NMW) will have on the economy.

On 1st October the hourly rates of low paid workers will increase to £5.80 for 22 year olds and above, £4.83 for 18 to 21 year olds and to £3.57 for 16 to 17 year olds.

The government made the decision on the minimum rates after analysis of recommendations made by the independent Low Pay Commission.

Designed to remove barriers which halt equality, the NMW policy is meant to have a positive impact on all workers in low paid sectors. However, the group most likely to benefit from the uprating are women, ethnic minorities and people with work-limiting disabilities as they are more involved in the labour market and in low-paying sectors.

Is British economy recovering?

noreply@blogger.com (London Registrars) — Thu, 11 Jun 2009 14:55:00 +0000

The April manufacturing figures published today by the ONS show that the manufacturing output rose unexpectedly by 0.3%. Is it the sign of the UK economy starting to recover?

According to Chief Economist at the British Chambers of Commerce, the recession is not over and ‘any talk of recovery at this is premature and potential misleading’. ‘Threats to the manufacturing sector's skills base remain serious, and it is important for the government to take steps that enable viable firms to retain their precious skilled workforce.’