Integrity with Professionalism

JMR SOLICITORS

We are well recognised, local and reputable business contract solicitor firm located close to Stockport. We have handled thousands of cases and have given 100% unique and tailored advice to every one of our clients. We are personable, professional and have a team that will always be in your corner.

JMR Solicitors LLP was recognised by the Prime Minister, David Cameron himself, as the number 1 female led fastest growing business in the UK in 2015. This wasn’t done by accident, it comes our unique approach and belief that our clients are our most valuable assets; and we operate an open culture and a team based approach that reflects this.

Legal Services

BUSINESS CONTRACT SOLICITORS STOCKPORT

JMR Solicitors have over 15 years of experience in assisting clients with their diverse business situations relating to the preparation of business contracts and agreements. Nowadays, business contacts and agreements are really very important for every company irrespective of their size. Your business is only as effective as the agreements you have in place with your clients and stakeholders. At JMR Solicitors, our Business Lawyers provide accurate and reliable contractual advice in a manner that best suits the requirements of your business. Our team of commercial and business solicitors first understands the issues faced by the client and then provides proactive solutions that eliminate legal deficiencies in both standard and bespoke contracts and agreements. Further, they offer practical advice on important issues such as limitation of liability, insurance and trading restrictions.

Our business contract lawyers review, draft, and negotiate business contracts related to the following:

PARTNERSHIP AGREEMENTS/JOINT VENTURES

At JMR Solicitors we can give advice on all types of business contracts and help you to decide which the best to suit your needs is.

A partnership is defined as involving two or more individuals, companies, groups or corporations where each partner participates in the operation of the business and is liable for its actions. Partners are also liable for any debts and profits made by the business.

Joint ventures

Joint ventures are most often short-term partnerships usually to bring about a specific goal, such as accessing a new market or to share costs. Once a joint venture is established, it can structure its business as a general partnership; limited partnership; a limited liability company which limits partner liability and allows the pass through of profits; or corporation which is treated as an individual with its own liabilities, assets or taxes. The laws that govern joint ventures depend of the type of structure that is established to conduct business and the scope of the partnership.

The benefits to entering into a joint venture include:

  • Accessing new markets and networks
  • Sharing the risks with your partner/partners
  • More resources and increased capacity
  • Access to specialised technology and staff

JMR Solicitors can help you to draft your joint venture agreement, setting out the responsibilities, tasks, contributions, roles, profit share, liabilities, resolution of disputes, management and control of all parties involved.

Partnership agreements

A partnership agreement is more suitable for long-term partnerships. The partnership agreement will define the behaviour and actions of the partners with regards to the business. A written partnership agreement is vital to avoid any uncertainty and the automatic of potentially unsuitable statutory law. Without a partnership agreement, the powers, rights and actions of the partners involved will be controlled by the Partnership Act 1890. Certain provisions include:

  • All partners are entitled to share the profits equally no matter how much capital, effort or skill they bring into the business.
  • All partners are jointly and severally liable for the liabilities incurred by the company. This means that if a debt cannot be paid then the creditor can pursue all the partners individually and one may be forced into the position of paying the whole debt by
  • Any partner can bring the partnership to an end just by giving notice to all the other partners. It is also dissolved if a partner dies.
  • Should a partner get into financial difficulties then their creditors can take assets from the partnership to settle them.
  • All partners have an equal say in the business and decisions can take time or the business break down in the event of a severe dispute.
  • All partners are considered “agents” of the business and act on behalf of the other partners. They can enter into contractual and financial arrangements which are not good for the business but these will be binding.

Having a partnership agreement in place will let you decide whether to apply the above provisions or not, and come up with your on to suit all partners involved.

BUYING OR SELLING A BUSINESS

Whether you are buying or selling a business, it is vital to seek legal advice as early as possible during the process in order to fully understand the type of agreement that you will need and to protect yourself from unexpected liabilities. Buying or selling businesses can be a complex process with many pitfalls for those who don’t have specialist legal knowledge. Every deal is unique, which means that there is no substitute for early legal advice to ensure certainty and to protect your investment or proceeds of your sale.

When selling a business it is vital to ensure that you have everything in order to protect yourself from potential claims from the buyer after the sale has completed. It is essential that the correct and thorough paper-trail is in place. You must have prepared you accounts, accreditations, licences and made sure that your books are up to date and complete. You must also ensure that you have filed accessible copies of you supplier, customer, employee and other contracts. This will all offer better protection from the buyer of your business. Failure to ensure these are completed can result in delays in the process and complicate the matter.

What you must do when selling a business

Inform HMRC that you have sold your business.
If you are VAT registered, you may be able to transfer your VAT registration number to the new owner.
You must complete a self assessment tax return, by the deadline, and include the date that you stopped trading on the return.
If you have made a capital gain when selling your business, you will need to pay capital gains tax. You may be entitled to Entrepreneurs’ relied or other reliefs and reduce the amount.
If anyone works for you, you must inform them of the sale and include the reason for sale and when you will be selling it. You must also include details of the redundancy terms or relocation packages that will be offered, if applicable.
Your responsibilities will differ if you are selling a partnership or limited business. JMR Solicitors can advise you on your responsibilities and also guide you through the process of any type of business sale.

Buying a Business

When buying a business you risk paying too much, as problems emerge long after completion. We reduce those risks, by identifying, quantifying and catering for them in the legal agreements. Otherwise the long established rule of “buyer beware” applies and you have little recourse.

We focus mainly on private company transactions. We act for either the buyer of the entire business or the acquirers.

We use our corporate law, share valuation, intellectual property (IP), and tax expertise to put you in the best position. Our team of solicitors who specialise in dealing with buying businesses is small enough to be cost-effective and large enough to meet your deadlines for completion.

We also support minority shareholders buying a stake in a business. Our skill is managing the process of buying a business – often a daunting task without the right support and advice. We apply our knowledge to all transactions with a degree of proportionality ensuring that your legal costs are reasonable.

The steps in buying a business

To achieve value for money there will be some steps to work through. Which steps are essential to you will depend upon the particular business you are buying. We work to streamline the process drawing on past experience. Below we describe:

  • Our track record for buyers of a business;
  • Confidentiality and exclusivity;
  • Heads of terms and the acquisition price;
  • Due diligence when buying a business;
  • The terms for buying a business;
  • What to look out for if you are an investor buying a stake in the business;
  • Reliance on warranties, and how warranties can affect the negotiations; and
  • Dealing with the employees acquired upon buying a business.

Buying a business – our track record

Some recent transactions include the purchase of a:

  1. Bicycle manufacturer: a well known brand with a celebrity sportsman’s endorsement agreement. The due diligence on the business’s intellectual property proved crucial, the value being in the target’s use of the celebrity’s name and image.
  2. Franchised business: to add to an existing portfolio of franchised businesses, the sole purpose to expand the territory of the franchise.
  3. Media agency business: acquired by a larger group, with all employees placed on incentive schemes to stimulate growth.
  4. Credit card business: which required new terms and conditions of use to be drafted in light of reforms to the financial services industry. Our due diligence revealed outstanding claims. We negotiated a full indemnity from the seller for all and any damages due on these claims from completion.

Buying a business: confidentiality and exclusivity

Our confidentiality agreements enable you to manage a variety of concerns, e.g. that the seller:

  • Has no obligation to keep anything confidential.
  • Could speak to other purchasers about your interests or plans for the business. This might be price sensitive information, market know-how, or trade secrets that you wish to bring to the target business.
  • Could waste your time and money. An exclusivity agreement specifies a period during which the seller agrees to only discuss the sale or investment with you, which encourages the seller to commit to a deal. This is also known as a lock-out.

SHAREHOLDER AGREEMENTS

Shareholder agreements are a way to ensure that when setting up a business, nothing goes wrong in the future. It can be easy to assume that the trust between shareholders at the outset will be enough to ensure that your business plans run smoothly, and that creating a shareholder agreement may make it seem like you do not trust your new business partners. However, even the strongest of relationships can break down and it is wise to have something in place to ensure that if this occurs, you do not end up with nothing. If the relationship between partners does break down and no shareholder agreement is in place, you could face a costly legal dispute with regards to the business and its future.

A well written shareholder agreement will act as a safeguard against these types of scenarios, and will offer you and your partners more protection should the situation arise. Although you may never need to rely on the protection that a shareholder agreement can give you there is always the possibility that you may need it, and may business partners and shareholders have found themselves in a situation where a carefully considered shareholder agreement would have saved them a lot of time and legal costs.

What is a shareholder agreement?

A shareholder agreement is an agreement between all or some of the shareholders of a company, drafted with the purpose of protecting the shareholders’ investment and to establish a fair relationship between them. The agreement will set out the rights and obligations of the shareholders, regulate the sale of shares, set out how the company is to be run, describe how important decisions are to be made and provide protection for minority shareholders.

How will a shareholder agreement protect me as a minority shareholder?

A minority shareholder is someone owning less than 50% of the shares. Without a shareholder agreement in place they have little say in the running of the business, and the control usually lies with one or two shareholders. Shareholders of more than 75% can overrule provisions to protect minority shareholders via a special resolution, thus leaving the minority shareholders with no protection and little control. There are laws that will provide minority shareholders with protection in these situations, but they can be costly to enforce and may not result in the outcome that is desired.

How will a shareholder agreement protect me as a majority shareholder?

If as a majority shareholder you wish to sell your shares and a minority shareholder is not willing to agree to this, you can include a provision that will force the shareholder to sell their shares. This is commonly referred to as a ‘drag along’ provision and will allow you to realise your investment at the time that you feel is most appropriate. Obviously, if this provision is put in place, any pay-outs and price of the sale will have to be made fair to all shareholders including the minority ones.

Additional provisions may be included to ensure that minority shareholders do not pass on confidential information to rival companies or set up competing businesses. Provisions can also be made to ensure that all transfers of shares are to individuals that are agreed upon. This can prevent the transfer of shares to competitors and conversely prevent unhappy shareholders causing problems by being forced to stay.

When should a shareholder agreement be put in place?

Ideally, a shareholder agreement will be in place at the formation of the company and when you issue the first shares. At this point it is best if the shareholders are of a similar mind with regards to their expectations of the business.

It may be possible for you to delay the discussion of a shareholders agreement until the business is established. While this may seem sensible at the time, an appropriate opportunity to arrange a shareholder agreement may never occur and by this point the expectations and feelings of the shareholders may have diverged, which would make it far more difficult to come to an agreement.

What should be included in a shareholder agreement?

The terms of a shareholder agreement should reflect the level of shareholding and number of shareholders in your business. This is something that JMR Solicitors can advise you on, however the key provisions that should be considered are as follows:

  • Issuing and transfer of shares
  • Protections for holders of less than 50%
  • Running of the company, including the appointment, removal and payment of directors; providing
  • management information to shareholders and banking and financing arrangements for the company
  • Payment of dividends
  • Competition restrictions
  • Procedure for dispute resolution

INCORPORATION AND BUSINESS DEVELOPMENT

With setting up a business it is essential to have a good working knowledge of business law and strict attention to detail, so seeking professional assistance is vital. JMR Solicitors have the experience and knowledge to guide you through the process and alleviate the stress from the process.

Benefits of incorporating

Incorporating your business may give you some protection should your business fail. As a sole trader, you would be personally liable for the debts should your business fail, potentially putting yourself in danger of bankruptcy if the debts owed are considerable enough and you are unable to make repayments. Being a limited company offers some protection against this, as legally a limited company is a separate entity and therefore its finances are separate from the finances of its owners.

As a director of a limited company, your risk of loss is restricted to the money that you have invested in the company itself, providing you don’t trade fraudulently or recklessly. However, please note that you will still be liable for bank loans if you have provided personal guarantees for the limited company.

Being a private limited company may also make you more credible to potential clients, customers, investors or partners.

Setting up a limited company

There are some ready-made limited company names available to purchase, however if you wish to form a new limited company you must submit a memorandum of association, articles of association and a IN01 form to Companies House.

JMR Solicitors can help you to complete these applications and draft your memorandum of association and articles of association on your behalf, as these cannot be supplied by Companies House.

What are the responsibilities of a company director?

A private limited company must have at least one appointed director. The director must be over the age of 16 and must not have been disqualified from acting as a limited company director or be an undischarged bankrupt.

Directors are responsible for notifying Companies House of any changes in the management or structure of the company. All accounts must be filed with Companies House each year, ahead of the requested date, or a fine will be payable. Accounts must also be audited annually unless the company is exempt from this. HM Revenue and Customs must be informed of any taxable incomes or profits by way of an annual return, after which, corporation tax will be payable.

Directors are employees of the company so therefore must pay class 1 national insurance contributions and income tax.

CONFIDENTIALITY AGREEMENTS

A confidentiality agreement, or a non-disclosure agreement, is a contract which relates to the mutual or one-way disclosure of potentially confidential information. Any business who has concerns regarding the unauthorised disclosure of its sensitive or valuable information can benefit from having a professionally drawn up non-disclosure agreement.

It can be easy to trust in the people that you share your confidential information with will not disclose this information without your consent, however there are often parties who would abuse the trust and information that they are given. The sensitive information of a business can often be valuable to competitors. It is for this reason that it is vital to have a non-disclosure agreement in place before any confidential information is shared.

Non-disclosure agreements are especially important if you are involved in developing a new product or potentially patentable invention. Without a non-disclosure agreement in place it may be difficult to get a patent for the invention, if one has not already been filed.

How do non-disclosure agreements work?

Non-disclosure agreements are contracts that dictate what can and cannot be done with the confidential information disclosed by one party to another. Non-disclosure agreements most often cover how far a party may disclose information within its organisation, the purpose of the disclosure of information, the period during which the information may be used, how the information is to be stored, dealt with upon termination and what happens in the event of a breach of the agreement.

How will my agreement be drafted?

The type and style of the agreement will depend on the kind of information that is being shared. If a small amount of confidential information is being shared face-to-face, a short agreement in letter form may be appropriate. For the disclosure of sensitive documents or more sensitive information is revealed then a more complex non-disclosure agreement may be drafted. Ready-made agreements are not recommended as they are not tailored to your specific needs and may not provide the level of protection that is required.

What can happen without a non-disclosure agreement?

Disclosure of your sensitive information can prevent potential patent ability, as discussed above, but it can also mean that competitors can gain from information that they learn about you product or business financially. Your reputation may also be at risk if it becomes known that information that is supposed to be kept confidential has been disclosed.

What can happen is a party breaches the agreement?

One of the major benefits of having a non-disclosure agreement is that you can sue if a party breaches the terms of the agreement. This acts as a deterrent and also means that remedy for the breach can be gained without difficulty. Without an agreement it would be one party’s word against yours as to the intent behind the disclosure. The agreement should also specify what damages can be claimed and set entitlement to alternative relief such as an injunction.

EMPLOYMENT AGREEMENTS

As soon as a person accepts your offer of a job, a contract will exist whether you intend it or not. However, you are legally required to give every employee a written statement of terms and conditions within two months of the commencement of employment.

If you fail to do this, the employee may then refer the matter to an Employment Tribunal who will decide what the terms and conditions of their employment are.The penalty for failing to provide a written statement of terms and conditions is either two or four weeks’ pay (capped at the maximum of £450.00 per week) unless there are exceptional extenuating circumstances.

Any contracts made should be checked by a qualified professional to make sure that the terms are relevant to the employee in question to avoid any risk of an Employment Tribunal inferring terms and conditions should any dispute arise.

What should an employment contract cover?

Terms you must include are as follows:

  • Name of the employer and employee
  • Date on which employment commences
  • If the employee has previously worked for a company acquired by you, the date on which continuous employment commences
  • How pay is calculated and when it will be paid
  • Details of working hours
  • Holiday entitlement and pay
  • Brief description of work and job title
  • Place of work
  • Details of grievance, disciplinary and dismissal rules and procedures

All employers must give their employees written details of any disciplinary rules and procedures regardless of the size of the company. If you fail to follow the guidance set out by Acas for what is fair and reasonable in this matter, an Employment Tribunal may increase any award made against you by up to 25%.

Also in the written statement, or other readily available and accessible documents, must be details of any terms and conditions regarding sickness, injury and sick pay, pensions, notice period for dismissal and termination by the employee and employer, length of employment and any collective agreement which would directly affect employment.

Other things to consider

When drafting your employment agreements it is key to ensure that you establish certainty for both parties whilst retaining flexibility. You should consider avoiding a job description that is too detailed and consider including a statement which establishes that you reserve the right to add or amend the employee’s duties and place of work to suit the changing needs of your business.

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