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When purchasing a business/shares, buyers want assurance that they will be getting what they pay for, without unexpected surprises down the road. This is where warranties and indemnities feature, acting as crucial safeguards to help protect a buyer from...
Incorporating a company in England and Wales involves various considerations, including understanding the required documentation, obtaining a company registration number, selecting the registered office, appointing directors and issuing shares. In this blog...
The remit of decision making for the board of directors of a company and the company’s shareholders is different – albeit for many smaller companies the shareholders and directors may be one and the same. The board of directors: guiding the...
Navigating shareholder meetings: private limited company obligations Private limited companies must take heed of their legal obligations under the Companies Act 2006 (the Act ) and under their constitution (their Articles of Association). Central to...
In the context of mergers and acquisitions (M&A), precision in financial matters is paramount, especially when it comes to establishing the purchase price. One method that can be attractive to buyers and sellers for its simplicity and transparency, is...
When it comes to selling your company, one crucial element that contributes to a smooth transition of ownership is the use of Completion Accounts. These financial snapshots play a pivotal role in defining the final financial terms of the deal. In this...
The existence of a quasi-partnership is a question of fact - a company is not incorporated and specifically designed to be a quasi-partnership and no specific documentation is issued for a company to become one – a company either is, or is not, a...
A director of a company inherits a number of significant legal duties under the Companies Act 2006 (the “2006 Act”). These statutory duties under the 2006 Act are “owed by each director to the company” and form the starting blocks of...
A share buyback is a purchase by a company of its own share capital from one or more of its shareholders. To complete an effective buyback, it is essential that the provisions of the Companies Act 2006 are strictly adhered to. To comply with the...
Any limited company incorporated in England & Wales must adopt and maintain Articles of Association which specify the rules and regulations governing that company. A company’s Articles of Association form its fundamental constitution. ...
A shareholders’ agreement is an agreement between the shareholders of a company and often the company is also a party. The agreement can be between all or some only of the shareholders (for example the holders of a particular class of shares). The...
Stamp Duty is a familiar term that you may hear when purchasing your home, but Stamp Duty is also a tax paid by the buyer when that buyer purchases shares in a UK company outside of an electronic system such as Crest (when Stamp Duty Reserve Tax would be...
A debenture is an instrument of security granted by a borrower to a lender, and if granted by a corporate borrower, is registered at Companies House against the borrower’s name. A debenture provides to the lender security over the borrower's...
The Enterprise Investment Scheme has been available for investments since 1994. It is a tax efficient scheme which was introduced to encourage equity investment in new and small companies. The EIS offers tax reliefs to individual investors who buy new shares...
A personal guarantee is a promise, given by an individual, to ensure that a third party fulfils its obligations and/or a promise to fulfil those obligations if that third party fails to do so. The individual who signs is a personal guarantee is therefore...
A restrictive covenant is also known as a negative covenant. It is an agreement or promise restricting the person or persons giving the covenant from taking certain actions. In a business context, a restrictive covenant is a clause in a contract or...
Due diligence is the process by which a prospective buyer of a company or business (the target) investigates the target to support its value and find out whether there are matters on which it requires further information or which it should use as a platform...
An earn-out is a deferred payment based on the post-completion performance of the target company. The earn-out is normally calculated with reference to the target company’s profits over a period post completion, but may be linked to other financial or...
Completion accounts are a method which may be used to confirm and/or adjust the purchase price, post completion when buying or selling the shares in a company. It may be something that the parties may consider if, for instance, the historic financials (e.g.,...
The term "alphabet shares" is typically used to describe different classes of shares which have been designated a letter (‘A shares’, ‘B shares’, etc.) in order to distinguish between the different rights attached to the...
