Discrimination arising from disability happens when an employer treats an employee unfavourably because of something that arises because of their disability (and which cannot be objectively justified). However, an employer will not be liable if they didn’t know the employee was disabled and could not reasonably have been expected to know.Continue Reading
Our lives are moving more online and sadly this has resulted in a rise in financial scams. A recent poll of over 2000 individuals by YouGov and Lloyds Bank found 10% of them had been the victim of a financial scam. Property transactions are particularly vulnerable, with high values involved and often time is of the essence. There are numerous cases where solicitors and sellers have been duped into sending the sales proceeds to fraudsters, or buyers have paid the purchase money to someone who was not the real owner.Continue Reading
Locking in your key employees is always a balancing act between work life balance, remuneration packages and showing employees they are valued and part of the very fabric of the organisation.
One of the most effective ways of imbedding employees into your business is through capital ownership, which provides a shared goal towards exit and increasing value.
This is a powerful way to tell a key employee of their value to the business and can create an “in this together” attitude.
Such a structure creates rewards for all on a fair basis through the eventual sale of the business.
One of the most popular types of employee share option schemes with SMEs is enterprise management incentives (‘EMI’).
EMI schemes are a popular way of attracting and retaining employees and they can provide significant tax benefits.Continue Reading
Back in 2000, legislation was introduced to ensure individuals who operated as independent contractors but who worked like employees, paid broadly the same tax and national insurance contributions as employees. The ‘off-payroll working rules’ are commonly referred to as IR35. With around 900,000 contractors operating in this way, this legislation affected a not insignificant part of the workforce.Continue Reading
What do Riverford, the organic vegetable box company, Richer Sounds, the hi-fi chain and Turleys, the planning consultancy have in common? Well, as from May 2019, they are or are about to become employee owned businesses with Julian Richer being the latest business owner to announce he is transferring 60% of his shareholding into an Employee Ownership Trust (EOT).Continue Reading
Proselytising is where someone preaches about religion with a view to converting other people to that religion. The Court of Appeal has recently examined when a dismissal for proselytising can be fair.Continue Reading
The Court of Appeal has decided that it is not discriminatory for an employer to pay men on shared parental leave less than birth mothers on statutory maternity leave. The Court of Appeal looked at the issue in a series of joined cases, including Hextall v Chief Constable of Leicestershire Police. In all the cases, men claimed direct or indirect discrimination for being paid less for shared parental leave than a woman on maternity leave.Continue Reading
A company voluntary arrangement (CVA) is a process that allows a distressed company to pay back its creditors over a fixed period of time. The company may negotiate to pay a proportion of the debt owed to the creditors as opposed to the whole amount thereby reducing its debts.
In order for a company to enter a CVA, 75% of the company’s creditors who vote at the creditors’ meeting must approve the CVA. Once in place, all unsecured creditors are bound by the terms of the CVA.
Is a CVA right for my business?
As with all insolvency processes there are advantages and disadvantages to a CVA.
A successful CVA can allow a company to restructure its cost bases or make any other necessary changes to improve its financial position while continuing to trade.
It is important to note that CVAs are not binding on secured or preferential creditors (such as employee wages or banks with security). There is also no automatic moratorium preventing creditors from taking action during the application process (unlike with Administration), so a CVA proposal may prompt creditors to consider a more formal insolvency process.
It is important to seek advice to see if a CVA is right for your business.
There are strict procedural requirements and time scales that must be complied with when applying to enter into a CVA. The CVA must be supervised by an insolvency practitioner (IP). The IP plays a key role in the application process.
For a proposed CVA to stand a chance of success it is essential that you seek early professional advice.
Get in touch if your business is experiencing financial difficulties and you would like to explore whether a CVA could assist. We regularly advise companies and IPs in relation to CVAs including, drafting documentation, attending creditors’ meetings , advising on any modifications put forward by creditors or any objections. We also assist clients where a CVA proposal has been unsuccessful or where a CVA has failed.Continue Reading
Company directors can be disqualified if they do not meet their legal responsibilities. When a company is unable to pay its debts the law sets out a number of specific duties that a director must comply with. However, this is likely to be a highly stressful situation and it is not uncommon for directors to be in breach of one or more of their duties for example, by continuing to trade the business when they know it cannot pay its debts.
If this happens they may be disqualified from being a director. Disqualification is for a specified period, between two years and 15 years. During that time the director is prohibited from being a director of a company, or directly or indirectly being concerned or taking part in the promotion, formation or management of a company without the court’s permission. The term ‘director’ is widely defined in the law and can include individuals who do not have the title ‘director’.
The court also has powers to order a disqualified director to pay compensation to the Company for the benefit of its creditors.
The Insolvency Service
When a company enters into a formal insolvency process a director’s behaviour will come under scrutiny. The liquidators or administrators are required to make a confidential report on the directors’ conduct to the Insolvency Service which may investigate you if there has been a report complaint of unfit conduct.
Unfit conduct covers the following:
- Allowing a company to continue trading when it can’t pay its debts
- Not keeping proper company accounting records
- Not sending accounts and returns to Companies House
- Not paying tax owed by the company
- Using company money or assets for personal benefit
For many directors the first knowledge they may have that there is a threat of disqualification will be the receipt of a letter from the Insolvency Service.
When operating a distressed business you will be making difficult decisions. Having a clear understanding of what is legally required of you is essential.
If you are concerned that you could face disqualification proceedings or if you receive correspondence from the Insolvency Service regarding your conduct as a director, you should seek professional advice as soon as possible.
We have acted for directors facing disqualification proceedings. We have also advised Insolvency Practitioners (IPs) on whether the actions of company directors amount to a breach of their duties. In addition, we have advised individuals who have been disqualified on their roles post disqualification and we have applied for leave of the court for them to hold office during a period of disqualification.Continue Reading
We advise a wide range of stakeholders on litigation that arises as a result of a company being insolvent. This includes actions against the company and its officers as well as actions which the directors, officers or insolvency practitioners (“IPs”) pursue on behalf of the company.
We advise directors/shareholders on numerous matters including:
- Directors duties and how to ensure they do not breach them and leave themselves or the company open to claims.
- Bad debts, property issues and other matters that could give rise to financial issues for the company.
- Claims against the company and the best action to take.
- Claims against employees, fellow directors and other stakeholders.
We regularly accompany directors and shareholders to meetings relating to disputes to enable them to obtain immediate advice on the best way forward.
We advise IPs on all aspects of litigation arising out of insolvency, whether that be bringing a claim on their behalf or defending one.
We also assist IPs with applications to court for directions, administration orders and extensions and approval of their costs.
Advising banks, lenders and other creditors
We regularly advise lenders, suppliers and other creditors on proposed actions against companies which are struggling to pay their debts. Our broad range of experience means that we can give useful commercial advice on the best way to recover debts and the realistic prospects of success. If an insolvency process is the best way forward, we can work with creditors to achieve the best outcome available.