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'Company & Commercial' Category Archives

August 7th, 2019

Company and commercial law solicitors

Company and commercial lawUnderstanding company and commercial law is central to starting and running a successful business.

By having an understanding of company and commercial law, you can safeguard your business and ensure that it is appropriately structured. This would allow your business to grow safely and effectively to reach its maximum potential. However, the law can be a challenging topic to understand, which is why we’re here to help.

At Foys Solicitors, our company and commercial law team want to assist businesses of all sizes with growth, adaption to changing markets and safeguarding business interests. This passion led us to update our ‘Company and Commercial Law’ page with a reliable and easy-to-understand explanation of how we can help business owners, shareholders and directors.

On our ‘Company and Commercial Law’ page, we’ve explained the areas of company and commercial law that we cover. Here, you will find information on:

  • Incorporations & start-ups
  • Corporate Governance for limited companies
  • Acquisition and disposals
  • Shareholder and partnership arrangements
  • Company reorganisations
  • Transferring sole trader/partnership business into a limited company
  • Commercial contracts

We also explain how company and commercial law assist in business growth.

Contact Foys Solicitors for advice on company and commercial law today

Whether you want more information on our company and commercial law services or to discuss a plan of action, get in touch with Max Kennedy on 01909 500511. Max Kennedy has more than 25 years of experience in company and commercial law and is known for his jargon-free explanations and practical approach to all matters.

Alternatively, you can complete our Contact Form and we’ll be in touch with you shortly.

May 8th, 2019

Just launched: The complete guide to becoming a commercial landlord

Commercial property represents an exciting investment prospect, and generating income from it is a highly attractive drawcard for potential investors. Becoming a successful commercial landlord requires a lot of effort; so finding the right advice is essential in order to make your business as efficient and profitable as possible. Whether it’s assistance in gaining better understanding of complex rental laws or the often-difficult task of finding the right tenants, Foys commercial property solicitors have compiled this essential guide to becoming a successful commercial landlord.

This comprehensive guide covers:

  • Why you should become a commercial landlord
  • Whether owning commercial property will suit you and your area
  • Costs of being a commercial landlord
  • Responsibilities of a landlord
  • Regulatory compliance
  • Setting rent and fees
  • Support for landlords
  • Finding the right tenant
  • Legal cover and insurance
  • Taxes that commercial landlords are liable for
  • Terminating a commercial lease

Foys Solicitors, the commercial property experts, offers bespoke, specialised advice catering to your specific commercial property needs. We understand the need for landlords to make the most out of their investments and assist on matters according to yours and your business’s best interests.

Contact Foys Solicitors commercial property solicitors today

For a free initial consultation, or to learn more about the legal specifics of operating commercial property, call us on 01302 327 136 or use our Online Enquiry form.

This post is not legal advice and should not replace professional advice tailored to your specific circumstances. It is intended to provide information of general interest about current legal issues.

February 27th, 2019

Understanding the notion of a ‘corporate personality’

The corporate world has no shortage of terminology that can be complex. For those entering the corporate world for the first time – often after transferring to a limited company from a sole trader or partnership – it’s important to learn what these terms mean to you and your business. With that being said, it’s also equally important for individuals with more experience in the field of company ownership to continue broadening their understanding of said terms.

‘Corporate personality’ is certainly one of those terms that can confound people – predominantly because it can be interpreted in so many ways. For example, it can refer to: a concept found in the Old Testament; the different personalities of people found in the corporate world; or part of a company’s corporate identity. For the purposes of this article, our company solicitors are going to discuss the legal definition of ‘corporate personality’ and the implications of such a concept in layman’s terms.

Defining corporate personality

At Foys, we work with directors and members of limited companies to assist them in understanding the legal implications of the day-to-day running of their business. One such implication is that limited companies are juridical persons. But before we get ‘lost in the weeds’, let’s work our way back from this term and define how this relates to corporate personality.

Law recognises legal entities as human (natural persons) and non-human (juridical persons). While humans become natural persons after birth, juridical persons are created when, for example, companies are incorporated. The latter can refer to entities such as firms, businesses, clubs, non-profits, and local governments. In this article, we’re going to focus on limited companies as juridical persons in the UK.

While not the first historical example of corporate personality, the history of companies as legal entities in the UK can be traced back to a legal case from the late 19th century – Salomon v A. Salomon and Company (1897).

The case surrounded the issue of personal liability – namely, that of Mr Salomon’s personal liability for the debts of a company of which he was the majority shareholder. After Mr Salomon lost in the High Court and the Court of Appeal, the House of Lords would overturn the decision. Presiding over the case, Lord Halsbury stated that a company that had been legally incorporated ‘must be treated like any other independent person with its rights and liabilities appropriate to itself’ thereby ruling that Mr Salomon was not liable for the company’s debts.

Thus, the concept of ‘corporate personality’ was defined – a term used to separate a company from its directors, members, and shareholders.

Implications of companies having a corporate personality

When a limited company is registered with Companies House, it becomes a legal entity. This means that limited companies have certain rights, responsibilities, obligations and privileges – including the right to sue, the right to be sued, the right to own property, and the right to enter into a contract – similar to those of a human.

How, then, does ‘corporate personality’ impact directors, shareholders, and other members? Well, it’s important to understand that this legally defines directors, shareholders, and other members as legal entities separate to the entity that is the limited company. Therefore, a company’s finances, assets, and liabilities are its own – not those of its owners. The company is accountable for itself – that is to say, rather than the directors or shareholders owning the company property, for example, the company owns this in its own right.

In essence, this means that unless directors or shareholders act wrongly in their duties and are found guilty of misconduct, they cannot be held personally liable for any debts or liabilities incurred by the company. This is to, in spirit, encourage entrepreneurship.

Why corporate personality is disregarded

Despite the enshrinement of companies as separate legal entities, there are examples of when this distinction, and the rights it affords, has been disregarded – commonly referred to as ‘piercing the corporate veil’ or ‘lifting the corporate veil’. While rare within the UK context, this often happens as a means of, essentially, treating the rights or liabilities of a company as that of its shareholders.

Simply put: as sentient beings, humans are cognisant of their rights and responsibilities; non-human legal entities (such as companies) are not. Companies rely on the integrity of their respective directors to make decisions that are in the best interests of the company’s health – as set out in the Companies Act 2006.

So if, for example, a director is trying to conceal the reality of a situation within a company or evade an action that affects the company, the Act stipulates that the company is not consenting to this behaviour. Again, this comes down to misconduct, in which case it is determined that the individuals behind the company (i.e. directors, shareholders, and other members) should take on the rights and liabilities of the company.

Often lifting the veil of incorporation is required in order to gain insight into a company’s ‘intent’. Though it may technically infringe upon the rights of a company as a non-human legal entity, in such situations this is construed as merely a way of establishing the truthfulness surrounding a legal case in order to properly direct the issue of culpability.

Examples of lifting the veil

There may be a piercing of the veil if a case involves statutory provisions. An example of these provisions can be found within the Insolvency Act 1986. Sections 213 and 214 of the Act relate to an offence whereby directors and other members have been charged with the offence of ‘fraudulent trading’. The existence of such trading would take the liability of the company’s debts away from the company and place it with the directors and other members – due to, as previously mentioned, said directors and members acting wrongfully in their duties.

Other examples and considerations include contracting of members around limited liability, a company acting as an agent to a member, the ‘concealment principle’ and ‘evasion principle’, reverse piercing, interposing a company, or the rights of a group of companies as a single entity.

What does this mean for you?

Assuming you’re involved in a limited company as a director or shareholder, ‘corporate personality’ essentially protects your rights should the company become liable to pay off a debt. This is reliant on there being no evidence of misconduct or misbehaviour from yourself or another director or shareholder acting in the company’s interests.

If you are considering incorporating a sole trader or partnership business as a limited company, Foys solicitors can provide further explanation of the notion of corporate personality, as well as giving bespoke, insightful advice about your rights and responsibilities and those of the potential company.

Foys: expert company law and corporate law solicitors

With over 100 years of legal cases involving the issue of corporate personality in relation to UK companies, it’s important to retain the services of legal counsel with extensive experience and knowledge in company law.

Foys’ company and commercial law team provide the necessary legal support and advice to help companies, directors, shareholders, and other members with issues relating to corporate personality, lifting the veil, or other company law matters.

We are committed to giving you a more thorough understanding of the laws that affect you and your business, while also providing legal advice on everyday company matters.

To find out more on how we can provide your business with company and commercial legal expertise, simply fill out our Online Form, or call your local Foys Solicitors office:

Relevant articles pertaining to company law are:

This post is not legal advice and should not replace professional advice tailored to your specific circumstances. It is intended to provide information of general interest about current legal issues.

February 20th, 2019

The implications of setting up a Limited Company

The decision to set up a new limited company, either from scratch or growing from a sole trader business or partnership, is a significant step that signals how you intend to run your business in the future. There is a plethora of financial and legal implications that need to be considered, as well as a number of statutory requirements that limited company directors are required to meet.

In this article, Foys’ specialist company and commercial solicitors discuss some of the reasons as to why limited companies are often chosen over partnerships, and detail the legal and financial implications that this process entails.

Why start a limited company?

For anyone considering setting up a new limited company, or transferring their sole trader/partnership business to a limited company, it’s important to consider the advantages and disadvantages of such a venture.

Common reasons why you want to set up a limited company include:

  • Limit your liability – your business is a legal entity and is separate from you. Your suppliers, clients, and employees enter into contracts with the corporate entity instead of you, and therefore you aren’t personally responsible for its debts, lawsuits and other adverse implications.
  • Tax consideration – the current corporation tax rate in the UK is 19% and will reduce to 17% for the year starting 1 April 2020; this is regardless of a profit of £10,000 or £100,000. Sole traders pay tax on personal income – and in tax year 2019/20, the basic rate is 20% on any income up to £37,500; 40% on income from £37,501 to £50,000.
  • Reputation – a limited company tends to carry more weight and has a better professional appeal than a sole trader. Your suppliers, customers, partners and employees may also perceive that a limited company is more credible than a sole trader.

In terms of the disadvantages, privacy is a commonly mentioned issue. Running a limited company means you are required to submit information about your company and yourself to Companies House, which can be viewed publicly and will include various personal details.

Also, as a director, you are directly culpable for your legal responsibilities as defined under the Companies Act 2006 – such as filing company records and reporting changes to Companies House and HMRC.

Legal obligations

There is a distinct nexus between the legal and financial considerations of a limited company. Many of the financial and tax obligations intersect with the legal considerations that you must make. For example, filing the return of company accounts to Companies House is statutory, as is the keeping of company documents and the reporting of any changes to Companies House.

One interesting legal dimension pertaining to the limited company is that your duties as a director are codified in the Companies Act 2006. This states that you must make decisions that are in the company’s best interests, the interests of the employees and the interests of shareholders – rather than your own. This means you are obligated to notify other directors and/or shareholders if you stand to benefit from a company transaction or if there is a conflict of interest. You must also avoid accepting benefits from third parties.

A confirmation statement (previously known as an annual return) must also be submitted annually to Companies House. This should essentially confirm that all of the details on file at Companies House are correct, including a register of persons with significant control (PSC) of the company. If there are any changes to your business after this has been filed, you must let Companies House know as soon as possible.

Lastly, you have to stay up-to-date on any regulations or laws that impact your business – such as matters of employment – as well as those that relate to your industry.

Required legal documentation

If starting a limited company or incorporating your sole trader or partnership business as a limited company is the right option for you, then we recommend seeking specialist legal support. A company solicitor typically assists with drawing up the following documentation:

  • Shareholders’ Agreement is a contract outlining the roles, rights and obligations of the limited company’s owners.
  • Memorandum of Association outlines the shareholders’ agreement to form the limited company.
  • Articles of Association detail the agreed upon written rules of running the company to be sent to Companies House.

If the document has to be changed for any reason, then you’ll need a lawyer to re-draft the document and notify Companies House of any changes, who will then pass this on to HMRC.

This serves the purpose of setting out your rights as a shareholder as well as protecting your shares in the company and can be exercised by one of our specialist company lawyers.

How company solicitors at Foys can help with your limited company

At Foys Solicitors, we understand how complicated it can be to set up a limited company or incorporate a sole trader or partnership business to a limited company and we can definitely help.

We have a proven track record of working with limited companies to ensure that they are meeting their statutory requirements as set out by the Companies Act 2006.

Our company lawyers offer legal advice on matters such as:

  • Questions relating to regulations and statutory expectations
  • Director disputes
  • Crafting shareholders’ agreements
  • Drawing up a memorandum of association and articles of association
  • Employment law matters
  • Commercial property transactions

We will work to safeguard your company against any legal complications while striving to help you grow and adapt your business to the challenges that lie ahead.

For us to understand your business better and offer our expert, bespoke guidance, we offer a free initial consultation that can be held at one of our many local offices.

To find out more or to book your free initial consultation, simply fill out our Online Form, or call your local Foys Solicitors office:

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This post is not legal advice and should not replace professional advice tailored to your specific circumstances. It is intended to provide information of general interest about current legal issues.

February 13th, 2019

Top 7 company matters where legal advice is needed

Whether you’re starting up a new company or on the cusp of taking your business to the next level, it’s important that you have access to sound legal counsel that will protect your corporate interests and assets. However, it’s often the case that legal advice isn’t always sought when it should be. This can be for a variety of reasons, including cost, forgetfulness, or a belief that it isn’t necessary. In this article, the specialist company and commercial solicitors at Foys list seven of the most common company scenarios where you really need to have legal advice in place before matters escalate.

  1. Disciplinaries and dismissals

When disciplinary procedures are required – or perhaps even dismissal procedures – it’s a difficult, complex situation. If your company does not have formal disciplinary or dismissal measures in place, then matters should not be approached without first consulting an employment law solicitor. Failure to do so could leave your company open to dealing with an employment tribunal or facing legal action – which could result in a costly settlement if you are found to be in breach of the ACAS Code of Practice on Disciplinary and Grievance Procedures (2015). Our employment law solicitors can help to draw up a policy for such procedures that will cover your company in the event that such a case arises.

  1. Disputes

It’s not just employees that can cause problems within companies; partners and shareholders can disagree on many issues and cause tension too. In fact shareholder disputes are common, and areas in which they can disagree range from the performance of the company to conflicts of interest and dividends, among others. Therefore, it is vital for your company to have the appropriate measures in place if such a situation arises. Involving a company lawyer in the early stages of your company’s formation can help you avoid this problem as we can assist with drawing up a shareholder or partnership agreement, which outlines the terms and conditions of your partnership and the way forward if a dispute occurs. Not having such a stringent agreement in place could end up costing you, and your company, a lot of money. In the unfortunate event that an employer-employee dispute or a shareholder dispute arises, our company dispute resolution specialists can help you to manage the situation.

  1. Contracts

When it comes to contracts, anyone can draw one up and have it be legally binding. It is generally used to denote an agreement of exchange between two parties – so a lawyer isn’t necessary. One of the most famous examples of this is the first contract between Barcelona football club and Argentine footballer, Lionel Messi, which was signed on a napkin! However, just because you can do something doesn’t mean you should. Lawyers should always be involved with any contract that your company wants drawn up. This is because disputes can and often do happen. A legitimate legal contract should detail the terms and conditions of the agreement, including clauses, which should clearly set out the rights and expectations of the two parties for the purpose of their agreement. In order to navigate this seemingly endless minefield of permutations, a lawyer is needed.

  1. Sales and purchases

A Sales and Purchase Agreement (SPA) is the legal document between a seller and a buyer which specifies the details of a transaction. As it usually covers price, payment terms, delivery, warranties, risk of loss, termination, dispute resolution, and governing law – as any of these terms can affect you, consult a solicitor if you aren’t sure. Terms and conditions for the sale of goods also require the expertise of a lawyer if you want to protect your business interests. Terms and conditions usually include a definition of what goods or services are being provided, the timelines for delivery (or, in some cases, license agreement lengths), payment terms, any guarantees, warranties or refund policies, and what happens if any of the aforementioned terms or conditions are violated. The same is true when you are buying products or services from another business. Your lawyer will be able to read the terms and conditions of any purchases that you make to ensure that your business is protected by the deal.

  1. Transferring a sole trader/partnership into a limited company

If you’re looking to restructure your sole trader or partnership business and incorporate it as a limited company, then you’ll need legal support. A company solicitor usually helps you to draw up the following:

  • A Shareholders’ Agreement is a contract outlining the roles, rights and obligations of the company’s owners.
  • A Memorandum of Association outlines the shareholders’ agreement to form the limited company.
  • Articles of Association detail the agreed upon written rules of running the company and should be sent to Companies House.

Additionally, if the document has to be changed for any reason, you’ll need a lawyer to re-draft the document and notify Companies House of any changes who will then pass this on to HMRC. Much like with a partnership agreement, this process helps to set out your rights as a shareholder as well as protecting your shares in the company.

  1. Commercial property and asset management

Acquisition and disposal of commercial property, refinancing, landlord and tenant matters, as well as asset management would require solid legal advice from specialist commercial property solicitors. Particularly on asset management, it is critical to consult a specialist lawyer who can help you to navigate the current regulatory climate and ensure that you and your firm understand and comply with existing and newly-introduced regulations surrounding asset management. This advice is essential in allowing fund managers and investment bankers to make informed decisions as well as ensuring they’re not vulnerable or out of compliance with any new rules or legislation.

  1. Debt recovery

When we think of recovering debt, we instinctively think of using a debt collection agency, however, this is often not the most effective method. If an outstanding debt is quite significant and you’ve exhausted all possible actions to get the debtors to pay, a specialist lawyer can be helpful – particularly if the debt is serious enough to warrant taking your debtor to court in order to reach a settlement. Irrespective of how you decide to proceed with the recovery process, a lawyer with experience in debt recovery is whom you should approach if a debt collection agency fails to satisfactorily close a past-due account, and may in fact offer their services at a comparable price point.

The right law firm can help you with all of the above

Finding the right company and commercial law firm to represent your company is key when it comes to protecting your business and its assets. Ideally, the right legal representation will have the expertise and knowledge to help you with the above matters and much more. At Foys Solicitors, we are specialists in business law. As well as the aforementioned points, we’ll be able to represent your company in the likes of:

  • Acquisitions and disposals
  • Discrimination cases
  • Employee handbooks and policies
  • Acquisition/disposal of freehold/leasehold property
  • Commercial property disputes

We like to build up relationships with our clients, and we’re always there to provide support through all manner of issues relating to your company.

To find out more about how our company & commercial law specialists can provide expert advice and produce watertight legal documentation for your business, contact Foys company & commercial law team by filling out our Online Form or call your local Foys Solicitors office.

This post is not legal advice and should not replace professional advice tailored to your specific circumstances. It is intended to provide information of general interest about current legal issues.