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Category Archives: Insight Article

Childcare during the school holidays: What are the options?

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Parents are often forced to choose between expensive childcare or relying on friends and family to look after their children while at work during school holidays. Childminders can get ill, go on holiday, or simply be unreliable, and funds may only stretch so far to cover childcare during the school holidays. So, what are the options?

What the law says

Time off for dependants

Whilst the law provides a reasonable amount of unpaid time off to take ‘necessary’ action, it only applies to dealing with particular situations affecting employees’ dependents (dependents being a spouse, civil partner, cohabitee, child or parent) (Employment Rights Act 1996). However, this only applies when an unexpected or sudden event involves a dependent and does not apply to planned time off to care for dependents.

Parental Leave

Parental leave is available to some working parents (Maternity and Parental Leave etc. Regulations 1999). Any leave taken is unpaid, and the employee must have been employed continuously for at least one year. The right applies to each child:

  • an employee with one qualifying child may normally take up to 18 weeks of leave;
  • an employee with two children would be entitled to 36 weeks of leave in total.

The option of taking parental leave may not always be feasible. You may not qualify. You may not want to step away from your job. Or, simply, you cannot afford to take parental leave.

Flexible working

Any employee (not just those with dependants) with at least 26 weeks of continuous employment can make a request for flexible working for any reason (Employment Rights Act 1996 and Flexible Working Regulations 2014). This can include covering childcare. An eligible employee may request a change to their working hours, the times they work and/or a change to their workplace.

Plan ahead. Under the statutory scheme, employers can take up to three months to consider a flexible working request and may refuse it for a legitimate business reason. Only one request can be made in any 12-month period. There is nothing to prevent an employee from making other informal requests. However, an employer will not be obliged to deal with them under the statutory scheme.

Bring your child to work?

Fundamentally, it’s down to your employer. If you work on a factory line or in a hospital, it is unlikely that you will be able to bring your child to work, but some spaces may be more suitable, such as offices. The ultimate decision rests with your employer.

If you can bring your child to work, it is critical that both employee and employer are aware of the risks involved:

  • Children may not be able to read workplace warning signs and signals.
    They must, therefore, always be supervised to avoid any incidents.
  • Noise and disturbance to other colleagues.
    In an open-plan office, the presence of children may disturb other team members. Consider whether a separate area or meeting room could be used instead.
  • Ordinary equipment may become dangerous.
    A photocopier or filing cabinet may seem a perfectly innocent item to an adult, but pulling or pushing in the wrong place can cause injury to a child. Tampering with electrical connections may also put children at risk.
  • Fire safety
    Has the safe passage of children been factored into your fire risk assessment, along with the extra hazards they bring?

To negate these risks, employers should consider putting in place the following:

  • Uniform rules for all staff
    It is unfair to allow one person to bring their children in but not another.
  • Health and safety revisions
    The workplace must be comprehensively risk assessed with the safety of both children and staff in mind, including fire risk checklists and evacuation plans.
  • Limitations
    Is there an upper limit to the age of children allowed? Is there a limit to the number of days permitted? Are there specific hours or days to avoid?
  • Notification
    Employers must set up a full procedure that allows workers to request permission for their children to come into work and timely notifications for when it may or may not be appropriate.
  • Facilities
    Will children stay in a meeting room or other separate area most of the day? Which bathrooms and kitchens will they use?

Other options

The idea of a creche in the workplace is not new. In fact, as long ago as 2003, Goldman Sachs brought London’s first on-site creche to the workplace. It offers its employees with children 20 free creche days per year, followed by paid use, allowing them to maintain a better work/life balance without having to leave the office.

Offering such facilities is usually expected to create an initial drop in productivity, but the opposite is the case. The ability to leave your child somewhere close by and safe while you get on with your working day transitions into increased staff loyalty and retention, both of which dramatically improve productivity levels overall. Running an on-site creche is far from cheap, meaning only a few large companies (Google, Addison Lee and BookingGo, for example) can explore this option easily.

If you need advice on whether you can bring your children to work during the school holidays, or if you’re an employer and are looking for advice on the matter, contact employment lawyer Karen Cole today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Tackling taboos on menopause in the workplace

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A woman with an unblemished 20-year service record was sacked by the Scottish Courts and Tribunal Service (SCTS) following an incident that led to a health and safety investigation and later to a disciplinary procedure. She won her case for discrimination after the tribunal ruled that her menopause was a disability, and she was awarded more than £19,000 and reinstated by SCTS.

The judgment did not suggest that experiencing menopause amounted to a disability in itself but said that the symptoms might have physiological and physical consequences that meet the definition of disability under the Equality Act 2010, with a substantial and long-term adverse effect on a person’s ability to carry out day-to-day activities.

The tribunal heard that the woman suffered significant medical problems due to going through menopause, sometimes experiencing heavy bleeding for several weeks, together with stress, memory loss and tiredness and was at risk of fainting.

The average age of menopause is 51, often with the start of the transition beginning several years earlier. In the UK, the number of women at work in their fifties has risen steadily, and the ruling is expected to drive further awareness of the topic, which until recently has been typically taboo for many employers.

Employment partner, Karen Cole, said:

“In the past there has been a stigma around discussing issues to do with women’s health, similar to the taboo concerning mental health, but those boundaries are breaking down and employers cannot ignore this issue.”

She added:

“It demands a shift in attitude for many to understand that the impact for some women going through the menopause will be the same as having a long-term health condition, for which reasonable adjustments must be made. So, for example, you may need to review working hours sleep is badly disturbed.

As well as being responsive to the situation, good employers will look to raise awareness within their organisation to ensure women feel able to raise problems, and to be sure that fellow workers understand how menopausal symptoms might affect their co-workers, and to normalise this life stage through open discussion.”

What the law says

The Health and Safety at Work Act 1974 requires employers to ensure all workers’ health, safety and welfare. In the case of menopausal women, this could include risk assessments that consider their specific needs to make sure the working environment does not make symptoms worse, for example, because of an over-heated or poorly ventilated office, and that welfare is supported through facilities such as toilets and access to water.

The Equality Act 2010 prohibits discrimination on the grounds of sex, whether directly, indirectly or by harassment. An example in the case of menopause could be where an employer does not consider symptoms arising from menopause to be mitigating factors in reviewing performance, whereas similar symptoms arising through another condition would be considered for male workers.

For further advice and information, contact Karen Cole today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

What is a personal representative?

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If the deceased has a will, the personal representative is called an executor. If there is no will, the personal representative is called an administrator, but essentially, they perform the same role.

Ten things a personal representative should do

The main duties of a personal representative are to:

  1. register the death and locate the original will (if there is one);
  2. arrange a funeral (banks will often release monies from the deceased’s account to cover funeral costs once they have been notified of the customer’s death);
  3. obtain a valuation of the entire estate;
  4. complete an inheritance tax account and lodge it with HMRC;
  5. apply for a grant of probate if the deceased had a will/apply for the letters of administration where the deceased has no will;
  6. collect any money and/or assets due to the estate;
  7. pay any outstanding liabilities and taxes out of the estate;
  8. obtain a clearance certificate from HMRC to confirm that the personal representatives are discharged from any further claim for the tax on the assets they have declared;
  9. distribute the estate to beneficiaries in accordance with the terms of the will, or if there is no will or if there is a partial intestacy, under the Intestacy Rules. Partial intestacy is where someone dies leaving a valid will, but the will only disposes of part of their estate. The intestacy rules will apply to the property that has not been disposed of under the will); and
  10. draft estate accounts to account for any assets collected, income accrued and any bills and taxes] paid during the administration. A copy of the estate accounts will then be distributed to all residual beneficiaries (also known as residuary legatees).

What happens if you don’t want to act?

It is unlikely that an administrator won’t want to act, as, unlike an executor, they have registered for the role rather than been appointed.

If you do not wish to act as an executor, you should discuss this with the person who appointed you. If they have passed away, you may still be able to renounce your role as an executor if you haven’t carried out any actions as executor. Once you have begun to carry out your role as executor, you cannot step down, save in very limited circumstances such as ill health or a family emergency.

If you have been appointed as a personal representative and need assistance carrying out your duties or do not wish to act, contact James McMullan for advice today.

Note: This is not legal advice; it is intended to provide information of general interest about current legal issues.

What is employment law?

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It doesn’t matter whether an organisation is a small company or a large corporate entity; employment law will come into play when it retains someone to work for it or provide services to it.

There are three main sources of employment law in the UK:

  1. law derived from case law (cases heard before the Courts and Tribunals);
  2. UK statutes and European law; and
  3. certain codes of practice also have influence, for example, the ACAS Code of Practice on Discipline and Grievance Procedures.

Generally, the UK enjoys the benefits of employment laws which strike a balance between worker protection and business flexibility.

Employment Tribunals have the authority to hear most claims arising out of breaches of employment law, for example, discrimination claims, unfair dismissal claims and wrongful dismissal claims. They can also hear some claims submitted by workers, for example, discrimination claims and protection of wages claims. In addition, the High Court and County Courts can hear breach of contract claims.

What does employment law involve?

Employment law falls into two main categories. One deals with employees and their rights and obligations and encompasses other categories of workers and the self-employed (as not everyone working for another is an employee). The other deals with employers and their rights, duties and obligations. Thrown into the mix are matters of legislation, statutory authorities, conduct regulations and the processes through which the law is implemented.

In summary

Employment law covers various issues, including recruitment, remuneration and bonus schemes, the movement of employees and their exit. For example:

  • Contracts of employment and service agreements
  • Confidential information and springboard injunctions[1]
  • Consultancy agreements
  • Disciplinary and grievance procedures
  • Discrimination and victimisation claims (including bullying and harassment claims)
  • Employee due diligence on business transfers (TUPE)
  • Employee share schemes
  • Equal pay
  • Family-friendly rights (maternity/paternity and flexible working requests)
  • Managing sickness absence
  • Performance management
  • Policies, procedures and handbooks (including social media policies)
  • Post-termination restrictions and garden leave
  • Redundancy and reorganisation (including collective consultation for large-scale redundancies)
  • Settlement agreements (formerly known as compromise agreements)
  • Sickness and absence from work
  • TUPE rights
  • Unfair dismissal and wrongful dismissal
  • Whistleblowing

It is important for employers to keep up to date with the latest developments in employment law and the practical implications of changes. To find out more, contact Karen Cole.

[1] An injunction is a court order restraining a person from beginning or continuing an action threatening or invading the legal right of another or compelling a person to carry out a certain act. A springboard injunction is an injunction to prevent a former employee who has used confidential information to their own advantage from gaining a head start in competition with their former employer. An ordinary injunction would not be effective as the information has been published and is no longer confidential. Back to article

Can I fire someone with less than two years of service?

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This is not, however, a green light to dismiss someone with less than two years’ service, as there are other employment law issues to consider. However, as an employer, it gives you some flexibility in managing and dismissing staff with less than two years of service under their belt.

When a new employee starts, keep an eye out for any concerns you might have and note their start date. If dissatisfied, it’s easier to dismiss someone in their first two years of employment, subject to some of the caveats below.

Know the risks

In some cases, there is no qualifying period of employment (i.e. length of service), for example, the ‘automatically unfair’ reasons for dismissal. If you’ve not heard of these before, read our article “What are the automatically unfair reasons for dismissal?”. Another area is discrimination. Employment law recognises nine types of discrimination:

  • age
  • disability
  • gender reassignment
  • marriage and civil partnership
  • pregnancy and maternity
  • race
  • religion or belief
  • sex
  • sexual orientation

Before dismissing an employee with less than two years of service, you should check that there is no discriminatory aspect to the decision.

You should also be aware that there is only a one-month qualifying period for an employee who is dismissed in circumstances where they should have been suspended on medical grounds.

Further, it is important to check whether any company policies or procedures are contractually binding. If so, you must ensure capability and disciplinary procedures are followed.

“Ideally a company’s policies and procedures should not form part of an employment contract, as this enables change without consultation.”

Irrespective of unfair dismissal claims, employees can claim wrongful dismissal for breach of contract if an employer does not provide the correct notice period or does not make a payment in lieu of notice. If this is the case, fairness is not even an issue. The sole question to be answered is whether the contract has been breached.

Lastly, don’t forget employees are entitled to be paid for any accrued holiday not taken at the termination date.

What to do – as a minimum!

Meet with the employee in question and outline any concerns you may have. Take notes at that meeting. Notes are important because they record what was discussed and are useful if issues arise further down the line. You may give the employee a short period to improve, for instance, if the issue is performance related. If you remain unhappy after this period, the option to dismiss can be pursued quickly and efficiently.

Dismissals close to two years of service

Employers should always seek legal advice when considering dismissing an employee with close to two years of service. It is important to bear in mind statutory and contractual notice periods even when you’re dismissing without paying notice.

“An employee whose termination date is the day before the second anniversary of their start date, will have two years of service and qualify for an unfair dismissal claim.”

Best practice

Employers should follow the ACAS Code of Practice on Disciplinary and Grievance Procedure. If the employer has unreasonably failed to follow the code, they risk facing a 25% uplift on any compensation. Therefore, a dismissal without notice may be met with an unlawful deduction from wages claim or breach of contract, along with an uplift, and a capability termination may be met with a discrimination claim, also with the risk of an uplift.

Employers following the code add robustness to any claim on an evidential basis.

If you’re unsure of how to get rid of an employee, speak to Karen Cole today.

Note: This is not legal advice; it provides information of general interest about current legal issues.

What are the automatically unfair reasons for dismissal?

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Some of these reasons are known as the ‘automatically unfair’ reasons for dismissal and are commonly borne out of UK statute. ACAS breaks these down into the following categories:

The .gov.uk website expands this further by adding:

  • acting as an occupational pension scheme trustee; and
  • whistleblowing.

With this ambiguity existing between the two most popular ‘go to’ websites, we thought we’d fill in some of the missing details and expand upon what’s included under some of these umbrella headings.

Under ‘pay and working hours’

As well as rights under the Working Time Regulations, annual leave and the National Minimum Wage, we would expand this category to include (or even detail) rights relating to flexible working arrangements, jury service, Sunday working hours, study leave, training requests and working tax credits.

Under ‘representation’

We would expand this point to include an employee’s right to be accompanied to a disciplinary or grievance hearing or to a meeting under the statutory retirement procedure to make it clear that this heading includes both the employee AND a representative.

As the counterpart to representation, we would add ‘consultation’ to the mix, as an employer has a duty to inform and consult with its employees in certain prescribed circumstances (such as collective redundancies, business transfers and health and safety matters) under the Information and Consultation of Employees Regulations 2004 and the Transnational Information and Consultation of Employees Regulations 2004.

Under ‘trade unions’

One of a trade union’s main aims is to protect and advance the interests of its members in the workplace, and most trade unions are independent of any employer. Therefore, an employer cannot impede any employee’s membership or non-membership of a trade union or participation in trade union activities, such as protected industrial action and collective bargaining arrangements.

Employers are also prohibited from compiling, using, selling or supplying blacklists of trade union members or activists.

Under ‘other’

Yes, unfortunately, we would have to add that infamous heading ‘other’ to both ACAS and .gov.uk’s lists, as both fail to mention agency workers, zero-hour contracts, pension auto-enrolment or where an employee asserts a statutory right (such as the right to receive a written statement of particulars of employment or not to have an unlawful deduction from wages). A dismissal will also be automatically unfair if an employer selects the employee for redundancy based on any of the grounds we have listed above.

So, what are the ‘fair’ reasons for dismissal?

Under the Employment Rights Act 1996, dismissal is usually deemed fair if an employer can demonstrate that it dismissed the employee for one of the five potentially fair reasons for dismissal and that it acted fairly and reasonably in treating that reason as sufficient to justify the dismissal.

The five potentially fair reasons for dismissal are:

  1. conduct
  2. capability
  3. illegality
  4. redundancy; or
  5. some other substantial reason

What else do I need to know?

Note: in an automatically unfair dismissal claim, the requirement for reasonableness (required for usual unfair dismissal claims) is not required.

Where dismissal relates to an employee’s political opinion or affiliation or to an employee’s membership of the reserve forces, the employee doesn’t need two years of service. However, these are not classed as ‘automatically unfair’ dismissals and still require the employee, in either case, to show that the employer did not act reasonably.

If an employee is dismissed in circumstances where they would qualify for suspension on medical grounds, the qualifying length of service to bring an unfair dismissal claim changes to one month.

If you have been dismissed or want to dismiss someone, call Karen Cole today to discuss your rights.

What can debt enforcement companies really do?

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The image of burly men banging on the door and taking away all your worldly goods hasn’t been helped over the years by the media’s portrayal of debt collectors on TV. However, there are limits to what debt collectors and court enforcement officers can do. Knowing your rights is important, so if you’re concerned about that ‘knock at the door’, here’s a brief guide to dealing with the bailiffs.

The difference between High Court Enforcement Officers, County Court Bailiffs and Debt Collection Agencies

The first thing is to understand that there’s a big difference between debt collection agencies, “DCA(s)”, who are usually private firms and enforcement officers (known as either High Court Enforcement Officers or County Court Bailiffs). Regardless of who comes knocking, there must be a set chain of events before the ‘bailiffs are called in’.

Initially, there should be plenty of contact between the creditor and the debtor, and the easiest way to avoid any type of debt collection situation is to keep the creditor fully appraised of your situation. If you are a creditor, you should first try to recover the debt ‘in-house’ or at least negotiate with the debtor to arrange manageable payment plans to pay off the debt. If that fails, then you can take things to the next level by bringing in a DCA.

DCAs often work on a “no collection, no fee” basis and should go through a process of written contact and phone calls before moving on to personal visits. Bear in mind, though, that DCAs do not have any enforcement authority, so they can’t enter a property to take control of goods in lieu of payment. They also cannot threaten, intimidate or lie to the debtor about what they can do, and debtors have every right to refuse entry to DCA agents.

Going through the courts

If the use of in-house and DCA methods are still not garnering results for the creditor, then they can go through the courts. The most common route is to apply to the County Court for a County Court Judgement (CCJ). This gives the debtor a certain time to pay the outstanding debt, usually two weeks. If the debtor still either can’t or won’t pay, it can be elevated immediately, and the court can authorise enforcement.

Who carries out an enforcement order?

Usually, a County Court Bailiff or a High Court Enforcement Officer executes the order. The debtor will be told of the decision to elevate the case to the court and that they have seven days to pay before officers arrive at their doorstep. Unlike DCA agents, court officers do have the right of entry and can seize goods to cover the cost of the debt if they are sure the assets belong to the debtor.

Bear in mind that if you are visited by a court officer pursuing a debt, then you will have to pay the debt itself, but there will also be additional charges depending on the size of the debt and the actions that the officers take to recover it. The longer you ‘string things out’, the more you’ll pay.

I’m a creditor. What’s my best option?

The cheapest option is a no-collection-no-fee debt collection agency, but as their authority is limited, it may not produce the results you want.

If the debt is substantial and you have demonstrated that you’ve given the debtor plenty of opportunities to pay, then the best option is to go straight to the County Court and then elevate it to the High Court to enforce payment. You will have to pay a fee, but the chances of getting at least some of your money back are higher.

If you’re worried about debt or are concerned that a debt owed to you hasn’t been paid, speak to Daniel Downes today.

A rocky road to freedom of expression

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A hospital nurse who discussed her Christian views with patients, offering a bible to one and advising another that his survival prospects would be improved if he prayed to God, was fairly dismissed for improper proselytising, a court has ruled. But another, where a quality control manager was asked to keep her sexual orientation under wraps, has seen a compensation award of £8,000 for direct discrimination. So what exactly is freedom of expression in the eyes of the law?

Nurse Sarah Kuteh was responsible for assessing patients about to undergo surgery, part of which involved asking them about their religion. Still, patients complained that she initiated the unwanted religious discussion. When the issue was raised with Mrs Kuteh, she assured management at the Darent Valley Hospital that she would not discuss religion again unless a patient directly asked her.

When further incidents followed, she was dismissed on the grounds that she had breached the Nursing and Midwifery Council’s code of conduct. She later issued an unfair dismissal claim, alleging a breach of a European Convention right to freedom of thought, conscience and religion.

When the case of Kuteh v Dartford and Gravesham NHS Trust reached the Court of Appeal, the court recognised the importance of the right to freedom of religion. Still, it said improper proselytising was not covered under Article 9 of the European Convention on Human Rights, which defends the qualified right to practice religion. As a result, the court ruled it was not unfair for the NHS Trust to have dismissed the nurse for proselytising to patients after being asked not to.

But in Mrs A McMahon v Redwood TTM Ltd and Mr Darren Pilling, the company found itself in hot water for stopping an employee from speaking out.

When Ashleigh McMahon joined the textile firm Redwood TTM, she disclosed that she was gay to her immediate boss during the first week of her new job. Still, he told her to avoid mentioning this to anyone else, saying the company’s owner was ‘old school’ and wouldn’t like it.

After being made redundant some months later, she made a number of tribunal claims against her former employer, including unfair dismissal and making a protected disclosure, as well as direct and indirect discrimination. Although the other claims were rejected, the tribunal agreed that the request by her manager amounted to direct discrimination on the grounds of sexual orientation, as the same request would not have been made to one of the company’s heterosexual employees.

Employment partner Karen Cole said:

“These two cases highlight the need for businesses to keep their recruitment and working practices under constant review, as there is growing pressure to keep pace with both the law and changing attitudes across society. There is no special exclusion clause for those who are thought to be ‘old school’ and everyone must make sure they refresh their mind-set. Employees cannot be treated differently because of their sexual orientation or any other protected characteristic.”

The Equality Act 2010 prevents direct and indirect discrimination based on protected characteristics, which include:

  • age
  • religion or belief
  • disability
  • gender
  • personal relationship status
  • race
  • sexual orientation

The protection of the Act extends to:

  • buying or renting property
  • consumers
  • education
  • private clubs or associations
  • public services
  • the workplace

Questions can be asked about health or disability only in certain circumstances, such as whether someone may need help to take part in an interview, whether disability covers both mental or physical impairments, and whether an employer should make ‘reasonable’ adjustments to accommodate disabled applicants and employees.

In addition, the Act makes it unlawful to discriminate against or treat employees unfavourably because of their pregnancy or because they have given birth recently, are breastfeeding or are on maternity leave.

Employees should not be required to share personal information if they are not comfortable doing so. However, they should not be precluded from discussing aspects of their private life if others who do not share their protected characteristics can freely discuss those aspects.

Employers should have up-to-date equal opportunities policies detailing their approach to equal opportunities and setting out what is and what is not acceptable.

Speak to Karen Cole regarding your freedom of expression concerns today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Lease renewals where there’s disrepair

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You’re a landlord, and having agreed to a lease renewal with your tenant, you’re obviously keen to get that in place ASAP. But before you rush ahead, have you considered dilapidations and the reinstatement of alterations?

It is critical to consider how to carry forward any outstanding dilapidation liability to a renewal lease. The best way is to agree on a dilapidations schedule and attach it to the renewal lease. The schedule should be unpriced, just listing the breaches and remedies required, because costs will change during the renewal lease term, and it avoids having an argument about costs at this stage. However, agreeing on such a schedule may still be contentious and could take some time.

It is likely to make more commercial sense to get the renewal lease and any increased rent in place, with the question of dilapidations being postponed to the expiry of the renewal lease. This can be achieved by including appropriate wording in the renewal lease.

The other key point to consider is that any alterations carried out under the previous lease will, on the grant of the renewal lease, form part of the premises. This means that at the expiry of the renewal lease, the landlord may not then be able to require the tenant to reinstate those alterations. It may also be problematic for tenants because those works could then be rentalised on any rent review under the renewal lease. Again, this is something that can be addressed in the wording of the renewal lease.

Dilapidations and reinstatement can amount to vast amounts of money and should always be properly considered with professional advice.

If you have a lease renewal coming up or any queries regarding dilapidations, call John Gillette today to discuss your options.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

How to sell a limited company

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For the founding members of many privately-owned companies, the end game is focused on selling up before moving on to new ventures or sometimes retirement. But many owners underestimate the time involved in making a business market-ready or do not seek advice on the different options before they start, nor the route-map to follow to secure a successful sale.

Ideally, an advisory team should be put together, involving a lawyer and an accountant specialising in company transactions, to guide the limited company on the preparation for sale before any moves are made to seek out buyers. Calling in advisors after a deal has been struck may mean financial or legal pitfalls that can cause a deal to fail in later stages, and the role of the advisory team in this preparatory stage is as important as any work they will undertake in finalising the deal.

Taking your time to get it right and make the business market-ready means that timescales of 12 to 24 months for preparation are not uncommon.

In putting together a detailed exit plan for a limited company, the first question you are likely to be asked is whether you are looking for a share sale or an asset sale, also known as a business sale. The answer may be influenced by personal, financial or legal reasons, which can be explored with the specialists. Still, the final decision will determine the process to be followed and the resulting tax implications for both buyer and seller.

It is worth mentioning before exploring this further that choosing between these two options will apply only to limited companies, where the company is an entity in its own right.

  1. Share sale. The shareholders sell their shares in the limited company that owns the trade and assets of the business.

    A share sale is effectively the clean-break option for the shareholders. The buyer is purchasing the whole company, its assets, liabilities and the business as a going concern. There is no need for new contractual arrangements with employees, suppliers, customers, landlords or others, as the corporate entity will continue in its present form; it is simply that the shareholding has been transferred.

  2. Asset sale. The limited company sells some or all of the assets which comprise the business.

    Here the seller is the company itself rather than the individual shareholders. Only those assets and liabilities identified and agreed to be transferred are involved in the sale. This can cover both tangible assets, such as property, stock or machinery, and intangible assets, such as intellectual property and goodwill. An asset sale may occur because a seller wants to retain parts of the business that will continue to operate or be sold elsewhere or because the buyer wants to cherry-pick and avoid certain company liabilities. As the business is being transferred to a different corporate entity, third-party contracts with customers and suppliers must be novated or redrafted; commercial real estate requires negotiation with the landlord to agree on an assignment of the lease, and there would have to be employee consultation. A Transfer of Undertakings (Protection of Employment) Regulations 2006 situation is likely to arise, commonly known as TUPE, where employment rights are protected and transferred to the new owner of the business assets.

The tax position is a key factor in the decision-making between these two routes. This is complex and specific to each situation. Still, individual shareholders will generally be better off in a share sale, with a single tax charge on any capital gains arising (which is likely to be reduced to 10% if entrepreneurs’ relief applies). In an asset sale, there is a potential double tax charge, firstly on the company, with corporation tax on the profit made on the sale of assets, and then on the shareholders when they withdraw the sale proceeds from the company.

Whichever of these two routes is finally decided upon, the management team needs to ensure that contracts and policies are all in order and that any disputes or other issues have been resolved. Once the limited company is ready to go on the market, a non-disclosure agreement (NDA) for potential buyers should be in place. Confidential information must be withheld from any interested parties until the NDA has been signed.

Once a deal has been agreed, buyers should be credit checked and their source of funds validated. If those pass the test, then set out the terms at an early negotiation stage. The sale price is important but not the only thing that matters. Getting a clear document setting out the heads of agreement, also known as heads of terms, can influence the way and speed the transaction progresses and means everyone knows what is expected of them. A solicitor should review any heads of terms before they are signed.

This is likely to include a timescale covering aspects such as when contracts will be sent, how long the buyer has to complete due diligence, and when the exchange of contracts and completion will occur. It should clearly define what is being sold and what may be specifically excluded. And while a non-refundable deposit is usual on the exchange of contracts, it is worth considering a deposit on the signing of the heads of terms, as this can protect against a buyer withdrawing without good reason or failing to meet the timescale.

At each stage, the most important thing is that all members of your advisory team are working with each other in a seamless way throughout the process, as well as directly with you. Where the ground shifts, as it inevitably will, they must remain focused on your vision for the company sale and work with you to achieve the best possible outcome in changing situations.

If you want to make your business market-ready and prepare for a share or a business sale, call Evangelos Kyveris today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

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News/Insight

  • Understanding Court of Protection applications in England and Wales
    When someone can no longer make decisions for themselves and has not put a Lasting Power of Attorney in place, the Court of Protection can step in. This article explains what the Court of Protection does, when an application may be needed, and what t


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  • Warranties and indemnities: Key protections in share and asset sales
    An overview of warranties and indemnities in share and asset sales, explaining key differences, common protections, liability limits and risk allocation.


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  • The Employment Rights Act is a call to action for employers 
    A new year, a new employment framework: what employers need to know about the Employment Rights Act passed by parliament in December 2025.


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  • Dilapidations explained: What commercial tenants and landlords need to know
    Dilapidations are a common source of dispute at the end of a commercial lease. They can involve significant sums of money and often come as an unwelcome surprise to tenants who believed they had left a property in reasonable condition. Understanding


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  • The role of due diligence in corporate transactions
    In corporate transactions, due diligence is a key stage that usually follows agreement of Heads of Terms, allowing the Buyer to investigate the target company or its assets before committing to the deal.


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What they say...

  • Sharla Munian, February 2026
    Outstanding Legal Support and a Brilliant Result “I cannot recommend RIAA Barker Gillette highly enough. My solicitor supported me throughout a very challenging property litigation matter, and thanks to her expertise, dedication, and strategic

  • Client, February 2026
    Very good service in disagreement with architect “RIAA assisted me in a conflict I had with my architect, who wanted to overcharge me. The end result was satisfactory, with invoices reasonable despite being slightly higher than expected!”

  • Sharla Munian, February 2026
    Outstanding Solicitor Who Delivered the Outcome I Hoped For “After a number of years navigating a complex financial settlement following my separation, my solicitor has been incredible from start to finish. Their professionalism, patience, and

  • Peter, February 2026
    Advice on potential claims by an employee & settlement negotiation “Clear, efficient advice and timely execution. I would highly recommend Patrick and RIAA Barker Gillette.”

  • Amish Bristol, January 2026
    Absolutely brilliant, fast, professional, clear and delivered a robust service “Recent mortgage oversight from Ben Marks and Anne was superbly dealt with, and I intend on moving all my business to them. For a big firm, they really do pay attent

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