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corporate governance & company administration
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| board & management change |
A well - implemented corporate governance strategy and company administration regime helps businesses create and maintain relationships with investors, shareholders, employees, customers and suppliers. Recent concerns over boardroom conduct highlight the serious repercussions associated with getting this wrong.
The law surrounding corporate governance and company administration is constantly changing and it is important for businesses to keep abreast and take advantage of recent legal developments and changes in best practice. Drawing on our extensive legal and industry expertise, we can advise private and public limited companies and their boards on all matters stemming from:
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| business incorporations | |||
| company liquidations & dissolutions | |||
| company name changes | |||
| company secretarial services | |||
| company structures & ownership | |||
| corporate reporting | |||
| corporate restructuring | |||
| corporate social responsibility | |||
| corporate strategy | |||
| derivative claims | |||
| shareholder disputes | |||
| shareholder rights & meetings | |||
board & management change
Choosing the correct management team is imperative to a business’ success. We regularly advise both companies and individuals on the corporate law aspects of the following:
- appointment and removal rights in articles of association and investment and shareholders’ agreements;
- appointment and removal of directors, auditors and other company officers;
- establishment of board sub-committees and their terms of reference;
- directors’ duties and conflicts of interests;
- arrangements with non - executive directors and their terms of office;
- establishment of share option and other employee incentive schemes and their effect in relation to a departing officer or employee;
- directors’ service agreements;
- consultancy agreements; and
- share transfers invoked by a departing officer or employee.
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White & Black assists a broad spectrum of domestic and international clients on matters relating to the establishment of new businesses in the UK. Through our close relationships with international advisers, we are also able to assist with the establishment of new foreign businesses or overseas branches and group companies.
We work with our clients to find the most appropriate structure for their new organisation, whether incorporated (such as limited companies, limited liability partnerships or limited partnerships) or unincorporated (such as “traditional” partnerships). We’re not caught up by short term objectives, and always keep an eye open towards our clients’ long term goals to ensure their chosen business structure helps them to secure finance in the future (for example, by allowing the creation of floating charges to assist with bank lending).
Our lawyers frequently advise on the following:
- fund formations;
- the establishment of UK trading subsidiaries;
- charity formations and registrations;
- business start-ups; and
- group re-organisations.
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company liquidations & dissolutions
At the end of a company’s life, it’s important to ensure that its affairs are properly wound up with the minimum of fuss and cost. Liquidating a company is actually a far more complicated process than forming a company and, from the perspective of the directors and shareholders, it’s vital that the correct procedure is followed.
White & Black can advise you on the correct approach to take when winding up a company’s affairs and distributing its assets. We can advise you on the following:
- can you take advantage of the “dissolution” procedure under the Companies Act, or will you need to go through a more formal liquidation process?
- what do you need to do in order to ensure that shareholders will not face a claim at a later date for the recovery of the company’s assets?
- is there any advantage to the company reducing its share capital prior to dissolution?
Recent guidelines published by the Treasury Solicitor have highlighted the risk of a company’s assets passing to the Crown when the company is dissolved, meaning that shareholders can find themselves being asked to repay money they have received on a dissolution if the correct procedure has not been followed. At White & Black, we are intimately familiar with the legislation here and we can help you to reach a conclusion which protects directors’ and shareholders’ positions and gives certainty to all concerned.
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We advise not just on the procedures to follow to validly change a business’ name, but also on the regulatory and commercial frameworks that govern precisely what a business can and cannot be called.
White & Black can assist with:
- avoiding the infringement of a third party’s intellectual property rights;
- protecting intellectual property rights;
- the requirements surrounding how and when a business name must be published and displayed;
- the procedures to follow to effect a change of name, whether these are internal (shareholder and board resolutions for example) or external (Companies House filings and representations to the Secretary of State for example);
- exemptions from using the word “limited” in a company name;
- directions from the Secretary of State requiring a business to change its name; and
- bringing and contesting objections to opportunistic registrations of similar business names.
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Whilst certain companies are no longer required to appoint a company secretary, the administrative responsibilities traditionally associated with this position remain.
We appreciate that company secretarial matters are often not high on a business’ list of priorities. To assist with this burden we offer an annual subscription company secretarial service that covers:
- provision of registered office;
- maintenance of statutory books;
- safe custody of statutory books;
- filing of annual return;
- assistance in relation to annual accounts; and
- inspection of company records.
Our company secretarial service is managed by lawyers with experience of providing professional and specialist company secretarial support to both national and international clients with a UK presence.
We will ensure that Companies House documents and company records are correctly completed according to the information supplied to us and (where necessary) make sure they are correctly filed on time.
company structures & ownership
Choosing the correct business structure is an important decision and will impact on, amongst other things, tax treatment, personal liability and attractiveness to investors.
We are experts in the complete spectrum of business types and advise start - ups on the establishment of new businesses in the UK and also established organisations on alternative structures and the creation of new group members. We work closely with our clients to make sure they not only choose, but also make the most of, the correct business structure.
White & Black can help you with, amongst other things:
- incorporation of new businesses or group members;
- transfers of assets, liabilities and contracts to a new group member;
- the allotment and issue of new shares;
- share transfers;
- distributions to shareholders;
- share buy-backs and reductions of capital;
- stamp duty clearances for intra-group transfers;
- implementation of new banking facilities and security arrangements for new businesses and group members;
- advice on group reorganisations through Insolvency Act and Companies Act procedures;
- advice to directors of companies on the brink of insolvency; and
- FSA implications of changing business structure.
We also advise on the adoption and interpretation of governing documents to regulate relationships between, amongst other things:
- partners in unincorporated partnerships;
- directors of and shareholders in limited companies (whether through articles of association, appointment letters or terms of reference for board committees or shareholders’ agreements);
- members in limited liability partnerships;
- investors and co-investors; and
- parties involved in joint venture and other collaborative arrangements.
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Our lawyers act for a broad spectrum of clients ranging from start-ups to large multinationals on the corporate law aspects of reporting to shareholders, investors and Companies House. We advise on:
- distributing annual accounts and reports to debenture holders and shareholders;
- in the case of a public company, holding annual general meetings and laying accounts before shareholders at such meetings;
- reporting exemptions available to certain small private companies;
- the requirements for quoted companies to publish annual accounts and reports on their websites;
- appointing and removing auditors;
- the contents of annual accounts and reports (and in particular the directors’ and Chief Executive’s statements) in the light of the restriction on unlawful “financial promotions” under the Financial Services and Markets Act 2000 and the exemptions available under the Financial Promotions Order;
- the disclosure requirements for certain listed companies under the Listing Rules;
- shortening and extending accounting reference periods;
- who can and cannot have access to a company’s accounting records;
- directors’ duties in relation to the preparation and signing of accounts;
- the liability of directors for defective and inaccurate accounts;
- in the case of certain listed companies, corporate governance statements under the Disclosure and Transparency Rules;
- the contents of annual accounts and reports in the light of the prohibitions on false and misleading statements in the Companies Act 2006 and the Financial Services and Markets Act 2000;
- the completion and filing at Companies House of annual returns and notifications of changes to a company’s officers and share capital (please see our Company Secretarial Service for further details); and
- the contents of business plans, circulars and other communications with investors and potential investors to ensure compliance with the financial promotions regime, the Prospectus Rules and prohibition on false, misleading or deceptive statements under the Financial Services and Markets Act 2000.
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Corporate restructuring can take many forms. At its most basic, it involves the consolidation of a group or the division of a company into group companies. These simple restructurings are usually driven by the basic aim of ensuring that the corporate structure reflects underlying commercial activities. More commonly however, corporate restructuring is associated with some wider purpose such as a return of funds to shareholders, a tax planning scheme or a scheme to reschedule company debt. Whichever you are considering and whether you’re looking to prepare a business for sale, divide up an existing business between different groups of shareholders or just simplify an existing group structure in order to increase business efficiency, White & Black can assist you in achieving your aims.
We have experience of innovative restructuring exercises as well as extensive knowledge of the more well-known processes, and we will work with your existing tax and accounting advisers in order to produce a restructuring plan which is cost-effective, tax-efficient and delivered on time. In particular, we can advise on the following:
- reorganising as a precursor to a sale or an acquisition;
- “direct dividend” demergers;
- “three-cornered” demergers;
- section 110 liquidation schemes;
- indirect reductions of capital; and
- part 26 Companies Act 2006 schemes
A corporate re-structure will often take the form of a reconstruction. These typically involve the transfer of all or part of the undertaking of one company to another company which then carries on that undertaking in succession to the first company. Again, it is common for both companies to have substantially the same shareholding structure and this is often driven by tax considerations. On occasions, reconstructions are undertaken as part of a “scheme of arrangement”. These schemes are now regulated under the Companies Act 2006, the relevant provisions of which came into force in April 2008. Such schemes require court approval but are incredibly flexible and can accommodate virtually any type of compromise or arrangement between a company and its creditors and shareholders or indeed any internal reorganisation, merger or demerger provided the requisite shareholder' / creditor approval is obtained.
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corporate social responsibility
We realise that corporate social responsibility (“CSR”) doesn’t just benefit the wider community, but also helps businesses create and maintain relationships with investors, employees, customers and suppliers.
White & Black assists a broad spectrum of clients with all manner of legal issues stemming from CSR, including:
- establishment and implementation of internal CSR policies;
- legal due diligence on, and procurement of, new suppliers and customers;
- advice in relation to CSR - focused terms of trading;
- advice on the corporate law aspects of charitable donations;
- negotiation and adoption of sponsorship agreements;
- assistance with brand protection;
- negotiation and adoption of employee secondment arrangements; and
- advice on and creation of alternative business structures to maximise CSR benefits.
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White & Black advises domestic and overseas clients on the legal issues involved in the formulation and execution of corporate strategy in the UK, including:
- preparing for and raising bank or private equity finance;
- encouraging outside investment;
- potential acquisitions or disposals;
- legal due diligence on potential acquirers, target businesses or competitors;
- disputes with customers, suppliers or competitors;
- disputes with shareholders, partners or officers;
- group reorganisations;
- economic downturn protection;
- establishment of UK group members; and
- directors’ duties and conflicts of interests.
Understanding our clients’ businesses is of paramount importance to us, and we strive to provide trusted business advice that helps our clients grow and achieve their full potential. A number of our lawyers are currently on secondment with clients or sit on clients’ boards in an advisory capacity providing advice on all manner of legal issues ranging from commercial agreements and brand protection through to corporate acquisitions and disposals.
We also advise on the use of derivative claims under the Companies Act 2006. Such claims can be brought against a company director of the company or a third party for negligence, default breach of duty and breach of trust. The Companies Act 2006 came into force on 1 October 2007 and adopts the recommendation of the Law Commission that there should be a "new derivative procedure with more modern, flexible and accessible criteria for determining whether a shareholder can pursue an action". The 2006 Act sets out a wide range of circumstances in which a derivative action may be brought by a shareholder (which is certainly broader than under the previous common law). In particular, a claim may now be brought even if a director has not benefited personally from his / her breach of duty and it is not necessary to show that director(s) control a majority of the company's shares. The process involves 2 stages:
- stage 1 - the shareholder must demonstrate, by evidence, a ‘prima facie’ case to the Court in order to bring a derivative claim (which is considered by the Court without evidence from the defendant);
- stage 2 - The court may require evidence to be provided by the company (prior to the start of the substantive action).
The Companies Act 2006 has also placed directors’ duties on a new, statutory footing. These include duties to promote the success of the company, to avoid conflicts of interest and not to accept benefits from third parties. A material breach of these duties is actionable by shareholders.
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Disputes can arise at a shareholder level for a number of reasons but the effective resolution of such disputes always requires an extensive knowledge of corporate law and in particular the law relating to company meetings and procedure. Board meetings and general meetings often have to be convened, resolutions proposed and tactics deployed to take advantage of the law around voting (eg the use of proxies), alternate directors, class rights and so forth. This is where our specialist knowledge of company law becomes so valuable to our clients.
Such disputes arise in a variety of situations, including:
- conflict of interest and related party transactions;
- non-payment of dividends;
- the provision of information to shareholders;
- exclusion from meetings;
- non-compliance with Investment Agreements, Shareholders agreements and Collaboration Agreements; and
- directors’ misfeasance and breach of duty.
At White & Black, we are able to advise on so-called “unfair prejudice” actions. These are claims that a company’s affairs have been managed in a way that is unfairly prejudicial to shareholders. In such situations, the Court has extensive powers (under s. 994 Companies Act 2006) to make various orders including an order for the mandatory purchase of a shareholder’s shares. These actions are often highly complex and time consuming and we always look to explore negotiated alternatives with our clients. We also advise our clients on the potential to seek an order under the Insolvency Act 1986 to have a company wound-up on the ground that this is “just and equitable”.
We also advise partners of LLP, LPs (under the 1907 Act) and unregistered partnerships on their rights in relation to disputes with co-partners.
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White & Black advises shareholders, companies and directors on all aspects of shareholders’ rights and meetings, including:
- the adoption and content of articles of association and shareholders’ agreements;
- disputes between shareholders;
- the calling and holding of valid general meetings and the resolutions required to be passed at them;
- the passing of valid written resolutions;
- minority shareholder rights;
- unfair prejudice claims;
- maintenance of statutory registers;
- the corporate law aspects of declaring and paying dividends;
- ultra vires acts and the ratification of directors’ actions;
- the corporate law aspects of share valuations;
- appointment and removal of directors and other company officers; and
- the reduction and return of capital to shareholders.
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