A ‘living Will’ for your business:preparing for changeMichelle Harte, AssociateCorporate Finance teammichelle.harte@bllaw....
Why bother? It makes good business sense. If you don’t – bigger legal fees!
Types of ‘living Wills’ for businesses Shareholders’ agreement Partnership agreement Limited liability partnership agre...
Shareholders’ Agreement (SHA) Overlap with Articles of Association. Different types of SHA and when you needthem. What ...
Main areas: Board composition. Decision-making at board and shareholder level. Minority protection. Deadlock and dispu...
Partnership Agreements No legal requirement to have one but…STRONGLY ADVISABLE! Reasons why
Main areas: Capital. Partnership property. Profits and losses. Decision-making. Internal governance. Commitment of p...
Limited Liability Partnership Agreements Again, no legal requirement but…– STRONGLY ADVISED! Reasons why Main areas cov...
Family Charters Family mission statement. Not just for the business owners. Use in conjunction with other businessagree...
Main areas: Family goals. Ethical considerations. Governance. Succession. Ownership of and sale of family shares. Em...
What you can take away from this Good business reasons to put a business ‘Will’ inplace. Watch out for businesses growin...
EMI SchemeKathy Hills, SolicitorCorporate Tax teamkathy.hills@bllaw.co.uk
Why?Employer: motivation cash Flow flexible ControlEmployee: low risk tax
Qualifying CompaniesThe company must: be independent; have gross assets less than £30m; have a UK presence; be trading...
Qualifying EmployeeThe employee must: meet the working time requirement; and not have a material interest in the company...
The OptionsThe options: must be exercised within a 10 year period from thedate of grant; must not be over shares which a...
Tax There is no charge to income tax/NICs on the grantof an option. No tax/NICs charge on exercise if exercise price ist...
Disqualifying Events Events relating to the company. Events relating to the employee. Other disqualifying events.
Exercise ‘Exit only Immediate Exercise Single Vesting Vesting in Stages Vesting Subject to Performance Conditions
Points to Remember Shares must be issued in the Topco. A sub-division of shares may be necessary. Options must be notif...
LLP Conversion – is it for you?Michelle Harte, AssociateCorporate Finance teammichelle.harte@bllaw.co.uk
What is a LLP? New (ish) form of corporate entity. More like a ltd co than a partnership? Formal incorporation process.
Limited Liability Partnership Agreement Strongly advised! Reasons why– Avoid default provisions.– Regulate your business...
Converting to a LLP First steps– Liaise with advisors re: suitability for conversion.– Live an overview of the conversion...
The legal process Incorporate a LLP Transfer business and assets– third party consents– TUPE– property– tax consideratio...
Non-legal considerations Notification to third parties Insurance Annuitants Update website / marketing materials / eng...
Why use Blake Lapthorn? Fixed fee package for conversion. Transparent pricing for ‘extras’. Meet with your clients to h...
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Blake Lapthorn Corporate seminar: SME's: planning today for tomorrow - 22 April 2013

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On Monday 22 April 2013 Blake Lapthorn's Corporate finance and tax teams hosted a Corporate seminar on SME's.

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Blake Lapthorn Corporate seminar: SME's: planning today for tomorrow - 22 April 2013

  1. 1. A ‘living Will’ for your business:preparing for changeMichelle Harte, AssociateCorporate Finance teammichelle.harte@bllaw.co.uk
  2. 2. Why bother? It makes good business sense. If you don’t – bigger legal fees!
  3. 3. Types of ‘living Wills’ for businesses Shareholders’ agreement Partnership agreement Limited liability partnership agreement Family charters
  4. 4. Shareholders’ Agreement (SHA) Overlap with Articles of Association. Different types of SHA and when you needthem. What they cover:– Management and operation of company.– Regulates relationship between theshareholders and company.– Provides a framework for managing expectations
  5. 5. Main areas: Board composition. Decision-making at board and shareholder level. Minority protection. Deadlock and dispute resolution. Distribution of profits. Issue and transfer of shares. Commitment of management team and shareholders. Incentives to management. Mission statement / exit strategy. Restrictive covenants.
  6. 6. Partnership Agreements No legal requirement to have one but…STRONGLY ADVISABLE! Reasons why
  7. 7. Main areas: Capital. Partnership property. Profits and losses. Decision-making. Internal governance. Commitment of partners.– duties, powers, restrictions, annual and other leave Retirement, death, suspension and expulsion. New partners. Dissolution.
  8. 8. Limited Liability Partnership Agreements Again, no legal requirement but…– STRONGLY ADVISED! Reasons why Main areas covered
  9. 9. Family Charters Family mission statement. Not just for the business owners. Use in conjunction with other businessagreements / ‘living Wills’.
  10. 10. Main areas: Family goals. Ethical considerations. Governance. Succession. Ownership of and sale of family shares. Employment of family. Communication between management and family. Dispute resolution. Support to other family members.
  11. 11. What you can take away from this Good business reasons to put a business ‘Will’ inplace. Watch out for businesses growing, converting to adifferent form, looking for investors, thinking aboutentering a joint venture. Client benefits– Reason for regular client contact.– 360° service to clients.– Local and readily available expert legal advice onhand.
  12. 12. EMI SchemeKathy Hills, SolicitorCorporate Tax teamkathy.hills@bllaw.co.uk
  13. 13. Why?Employer: motivation cash Flow flexible ControlEmployee: low risk tax
  14. 14. Qualifying CompaniesThe company must: be independent; have gross assets less than £30m; have a UK presence; be trading; and have less than 250 employees.The aggregate limit of unexercised options in thecompany must not be more than £3m.
  15. 15. Qualifying EmployeeThe employee must: meet the working time requirement; and not have a material interest in the company.The maximum value of options for each employee is£250,000 in any 3 year period (only the excess over£250k is disqualified from EMI status).
  16. 16. The OptionsThe options: must be exercised within a 10 year period from thedate of grant; must not be over shares which are redeemable orconvertible; the exercise price should be fixed at the date of grant;and the grant must be notified to HMRC within 92 days ofthe grant.
  17. 17. Tax There is no charge to income tax/NICs on the grantof an option. No tax/NICs charge on exercise if exercise price isthe same as the market value (on grant). Once exercised, the exercise price becomes CGTbase cost. No minimum holding required to qualify forEntrepreneurs Relief on a sale. The ownership period now starts to be counted fromthe date of grant of the option and not the acquisitionof the shares.
  18. 18. Disqualifying Events Events relating to the company. Events relating to the employee. Other disqualifying events.
  19. 19. Exercise ‘Exit only Immediate Exercise Single Vesting Vesting in Stages Vesting Subject to Performance Conditions
  20. 20. Points to Remember Shares must be issued in the Topco. A sub-division of shares may be necessary. Options must be notified within 92 days of the date ofgrant – otherwise the option scheme does not qualifyunder EMI. For exit-only options – there should be flexibility for acashless exercise within the scheme rules. Some changes amount to the grant of a new optionthus triggering a new valuation date.
  21. 21. LLP Conversion – is it for you?Michelle Harte, AssociateCorporate Finance teammichelle.harte@bllaw.co.uk
  22. 22. What is a LLP? New (ish) form of corporate entity. More like a ltd co than a partnership? Formal incorporation process.
  23. 23. Limited Liability Partnership Agreement Strongly advised! Reasons why– Avoid default provisions.– Regulate your business and the relationshipbetween the business owners (members).
  24. 24. Converting to a LLP First steps– Liaise with advisors re: suitability for conversion.– Live an overview of the conversion process.– Advise on change in status.– Review existing terms of business.
  25. 25. The legal process Incorporate a LLP Transfer business and assets– third party consents– TUPE– property– tax considerations Draft the LLPA
  26. 26. Non-legal considerations Notification to third parties Insurance Annuitants Update website / marketing materials / engagementletters Pre-order new stationary / signage Timing and timetable
  27. 27. Why use Blake Lapthorn? Fixed fee package for conversion. Transparent pricing for ‘extras’. Meet with your clients to have initial talk aboutconversion process for free. Locally based and readily available legal expertise inthis area. We have acted for some of you already!

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