Aquisitions & Disposals
- Helen Curtis
- Updated: Mon, 21st Nov 2016
We have run a huge variety of corporate transactions over the years acting for both buyers and sellers. We jump hurdles and solve issues. We know that your personal interests are part of the business and will look after both sets of interests. We can scale to successfully run both smaller transactions and larger deals for buyers or sellers.
Our corporate transactions service will solve:
Standing out from the crowd – about our team
We know that the market is competitive – so why do we stand out? The answer is we hope you will find that our service goes much further than traditional legal advice which is often delivered in a vacuum to the real world.
- If we believe that you may be about to embark on a bad move we have the courage to tell you.
- Legal advice is only good if it is in context and proportionate. To make sure our advice is in context we make sure we know you and your business, know what the financial projections look like and flag up issues you may not have considered.
- Our taxation expertise together with our expertise in private company valuations all work together to deliver what we hope you will consider goes beyond what our competitors offer.
- We apply intellectual intelligence which is not available from a straight template document download. The crafting of advice and documents is our core trade.
Commercial factors in a corporate transaction
Working with entrepreneurs and SMEs has taught us to think commercials first and then tailor the legal documents to fit. Things to think about include:
Financing for the corporate transaction
This goes back to a crucial consideration: debt vs equity financing and risk. Our accounting knowledge puts us in a position to advise on the financial implications of the deal, arrangement or structure. Our skill is to de-risk as far as possible.
Shareholders of either the buyer or seller
Shareholder rights and views are the bedrock of any corporate transaction. We deal with concerns and find solutions knowing that shareholders do have certain rights and remedies under company law. We consider whether the deal, arrangement or structure will benefit the company’s shareholders to ensure that the transaction can be dealt with smoothly and in a time efficient manner.
As a director, you make the day-to-day decisions to run the business successfully. Consequently, directors have a duty, amongst others, to promote the interests of the company as a whole. We will tell you whether your decisions are subject to challenge by the shareholders. If they are, we can pre-empt any shareholder move by seeking approval.
We review and/or negotiate commercial contracts. Obviously advice before you sign can be cheaper than the advice you may need if you subsequently regret the deal or certain aspects. We have explained some of the more common pitfalls arising in corporate transactions belo
Intellectual property rights under a corporate transaction
Is the intended structure tax efficient? If not, we can advise on alternative structures that may benefit your business. Often a structure which works for a seller does not work so well for a buyer. We are alert to the implications and can handle the debates.
Tax payable by sellers of shares
We deal with taxation for the sellers and entrepreneurs relief on the disposal of shares or assets under a corporate transaction.
Tax reliefs for investors
We have set up many companies so that they can attract investors by offering investors under SEIS and EIS. We can deal with the legal documentation and obtain clearance that the company qualifies for SEIS and EIS from HMRC.
We advise sellers on how share incentives can help achieve an exit. We also advise buyers on how a share incentives scheme can motivate the employees and directors acquired following an acquisition. Our specialist team can advise on employment law rights arising under a transaction.
Pitfalls arising in a corporate transaction
Something will go wrong, it always does. Our service brings you a steady hand to guide you over the problems and get the deal across the line. Our steady hand comes from many years of experience.
Solving conflict in a corporate transaction
Directors and shareholders are separate entities within a company; a company itself has its own separate legal personality. A common pitfall is not dealing with conflict areas adequately; we get the paperwork right to prevent the possibility of a challenge.
Legal documentation used in a corporate transaction
Agreements for the sale and purchase of business assets and shares have to be carefully negotiated, reviewed and drafted to ensure that your interests are adequately protected. We take care of that for you.
A common pitfall is penalty clauses. In essence a penalty clause usually:
- Includes provisions for the innocent party to enforce obligations of an agreement; and
- Includes a fixed sum, known as a liquidated damages clause, which the innocent party can claim, and enforce.
The default position is that a penalty clause is unenforceable, but a genuine pre-estimate of loss is not. We know the difference and can review, and negotiate the corporate transaction legal documentation to ensure that if there are concerns over the other party’s performance, or where it is suspected that a warranty may be breached, that a liquidated damages clause giving a genuine pre-estimate of loss can be enforced.
Liability under a corporate transaction
Many sellers signing an agreement to sell their business believe that if there is an overall cap on the liability, then that cap represents the absolute maximum they will have to pay back if any of the warranties they have given to the purchaser prove to be incorrect. Resting comfortably on the assumption that the worst case scenario is this cap, sellers may not be aware of the lurking dangers which can mean that their overall liability could be much higher.
While a warranty is a promise in a contract, a representation is a statement of opinion or fact which persuades someone to enter into a contract but does not form a contractual term, (although it may be restated in a contract). The point becomes relevant if the buyer after the corporate transaction has completed considers there has been a misrepresentation. A common problem area is the accounts.
If there has been no representation there can be no misrepresentation. Being alert to these types of issues, which we are, is a support you will need.
Corporate transactions recent track record
Our clients tell us that they felt safe and confident that we would get the transaction concluded on best terms achievable. We do not raise ridiculous legal points of little commercial value. We do have an eye for the weak spots and build on those. Our recent instructions include:
- Advising the founders on the sale of an IT tax software business to PWC.
- Advising on the acquisition of a chain of fast food outlets.
- Dealing with the turnaround of a previously failing business under new management.
- Advising the management team on the management buy out of a media agency
- Advising a high net worth individual on a joint venture between a US bank and a European venture capital house.
Corporate transactions are a mixture of finance, law and practicalities and you need a law firm that is balanced – that is us.
Our advice is straightforward and to the point. We aim to build a relationship that will see you through your stages of development. You will find our fees proportionate to your risks.