OneSky Flight acquires helicopter booking service
OneSky Flight has a large aviation portfolio providing the industry’s leading private jet travel solutions. The deal allowed our client to expand its airline booking service into helicopters as a complimentary business providing their customers with a complete aircraft travel solution.
To find out about similar cases, please contact Leigh Head.
Acting for the shareholder of two iconic music venues
Big Issue Invest has made a significant investment in VU X Earth Limited, the new holding company set up to acquire the group.
Music and arts ventures have been heavily affected by the pandemic so the new funding will allow for additional refurbishment and a training workspace for young people entering the music industry. Over the next five years VU will be collaborating with Hackney Empire, Hackney Music Service and Progression Session, a music charity that provides a platform for young artists and trains young creatives for careers in the industry.
The investment means they can get right back to hosting some of the greatest musicians from around the globe, supporting and inspiring new talent.
You can read more about the investment in Access All Areas, by clicking here.
To find out more, please contact Leigh Head.
The Sherrards Corporate team advises Screwfast Foundations Ltd on sale to Van Elle Plc
Screwfast Foundations Ltd are leaders in the design, supply and installation of helical piles and UK & International steel foundation solutions. They are well-known in the construction industry, having worked on prestigious construction projects such as the London 2012 Olympics and the government’s smart motorways programme.
The team worked to a tight timeframe to ensure that the sale took place in line with the requirements of the PLC buyer. The deal was structured with complex provisions regarding the existing plant and machinery of Screwfast.
This matter have been written about in the Construction Enquirer.
To hear about similar cases, please contact Kiall Bagnell.
Sherrards continue to work with long standing clients Winkworth Franchising Ltd
They continue to undertake a wide variety of work including advising on acquisitions and disposals, reviewing and updating the full suite of franchise agreements for roll-out across the network.
The Sherrards Employment team also support their head office with their employment law and HR needs, as well as advising on matters involving the franchisees.
This year the Franchising team have worked closely with Winkworth to update their internal new and renewal processes for franchisees in their network with the planned roll out of a new franchise agreements to their network of franchisees (circa 110) in their network.
To find out more, please contact Kiall Bagnell.
Sherrards Corporate teams help with the sale of The Plough
This company are the owners of The Bull in Highgate and a local microbrewery. They reopened The Plough in October 2021 with great success.
Sherrards’ property and corporate teams worked together to complete the transfer of each constituent part of the business to the new buyer.
Sherrards advised client Powerday on the acquisition of IOD Skip Hire Limited
This acquisition was led by Charles Hodder but also involved our corporate & commercial, employment and dispute resolution teams. The IOD Skip Hire site became Powerday’s sixth facility in London and means they will inherit the affiliated businesses of IOD.
The transaction was complicated, but we successfully completed the deal due to the team’s experience in the market and ability to work brilliantly across departments, bringing together specific expertise to ensuring seamless transaction.
GDPR- Top tips two years on
On 25 May 2018 the General Data Protection Regulation (GDPR) came into effect, and was heralded as the EU’s biggest shake up of data protection regulation to date.
In the run up to ‘GDPR-Day’ we were inundated with emails from businesses asking us if we wanted to “stay in touch” and asking us to re-consent to email marketing. Businesses scrambled to put in place GDPR compliant privacy policies by the 25 May deadline, with the threat of fines at a maximum of €20 million or 4% of annual global turnover on the horizon.
However, the reality is that many organisations had not completed their GDPR preparations by that date, and with the perceived grace period for implementation over the last year, many companies are still behind.
This week, over a year after the GDPR came into force, we saw the ICO issue its first public fine, hitting British Airways with a huge £183m fine (although still some way under the maximum 4% of annual global turnover that could have been issued). Before this, fines under the GDPR had been limited. Over the past year there had been €56 million in fines issued against errant organisations, of which €50 million was issued against Google by the French data protection office and the balance split between much smaller fines throughout the EU.
Notwithstanding, what is obvious is that individuals are more conscious than ever about what data they share, who they share it with, and what those organisations then do with it.
The GDPR is intended to be an exercise of ongoing compliance, rather than a tick-box-exercise. Our top tips for achieving ongoing GDPR compliance are below:
- Policies and Procedures
As a bare minimum, organisations should make sure that they have in place GDPR compliant privacy policies and cookie policies, and have systems and procedures in place to record their processing activities (including processing purposes, data sharing and retention).
If you are carrying out processing that is likely to result in a high risk to individuals, you must ensure that you carry out Data Protection Impact Assessments (“DPIA”).
This is not the end of the exercise, however, with the ICO stating in their annual review earlier this year that one of their focuses for 2019 is ensuring that organisations move beyond ‘bare compliance’.
- Register with the ICO and pay the relevant fee
This requirement is easy to satisfy. Any organisation that is a data controller needs to register with the ICO and make payment of the annual data protection fee. This is one area where the ICO has been cracking down on both larger and smaller companies, and imposing significant fines for non-payment.
- 3rd Party Contracts
The GDPR requires organisations (data controllers) to enter into written contracts containing specific provisions with any 3rd party that processes personal data on its behalf (data processors).
This is one area where we often see organisations falling behind, and particularly where personal data is transferred outside of the EU. Having in place a standard set of contractual provisions which can be included in any terms of service or supplier agreement can be simple way of ensuring that this element of compliance is dealt with.
- Data Subject Access Requests
Does your organisation know how to handle a Data Subject Access Request (“DSAR”)? Over the past year we have seen an increase of DSARs, and in particular those issued by employment lawyers or litigators looking to secure a tactical advantage. Individuals do, however, have a right to access their personal data, and organisations need to know how to respond to these in an effective and efficient manner to avoid expending unnecessary time and resources or a breach of the individual’s rights.
- Ongoing training
Many organisations will have carried out some element of training in the run up to the GDPR deadline last year, but it is always sensible to ensure that staff are kept up to date. Organisations should consider running regular refresher training, particularly for staff who handle large amounts of personal data including HR and marketing. This is key for understanding what to do in the event of a breach, upon receipt of a DSAR, and when to carry out a DPIA.
- Appoint a Data Protection Officer (if necessary)
The GDPR makes it a legal requirement to appoint a Data Protection Officer (“DPO”) if (a) you are a public authority or body, (b) your core activities require large scale, regular and systematic monitoring of individuals (for example, online behaviour tracking), and (c) your core activities consist of large-scale processing of special categories of data or data relating to criminal convictions and offences.
Organisations can also choose to voluntarily appoint a DPO.
The DPO can be an existing member of staff, or externally appointed.
- Work towards “data protection by design and default”
This means you have to integrate or ‘bake in’ data protection into your processing activities and business practices, from design right through the lifecycle. Data protection by design is about considering data protection and privacy issues upfront in everything you do. It can help organisations to ensure that they comply with the GDPR’s fundamental principles and requirements, and forms part of the GDPR’s focus on accountability.
To find out more, please contact Kiall Bagnell.
Directors face hidden dangers in insolvency Twilight Zone
UK businesses are in an extended period of uncertainty, and corporate insolvencies are at their highest since 2014, according to the Insolvency Service. The impacts are most visible on the high street where news of established brands going under is a regular occurrence. This is, unfortunately, only going to be accelerated by Covid-19 and the current marketplace we are all in, despite the Government’s best attempts and financial stimulus packages.
Directors of limited companies take comfort in the fact that their liability is just that – limited. But many do not realise that they can incur personal liability in the period when their business is hurtling towards insolvency – the so-called twilight zone.
The dangers lie in the seven general duties of directors in the Companies Act 2006. These are to:
- act within your powers
- promote the success of the company for the benefit of its members as a whole
- exercise independent judgment
- exercise reasonable care, skill and diligence
- avoid conflicts of interest
- declare your interest in any proposed or existing transactions or arrangements with the company; and
- not accept benefits from third parties.
These duties are important in insolvency proceedings, such as liquidation or administration, because breaches of those duties can enable insolvency practitioners to pursue an offending director for a greater recovery for the company’s creditors.
Many directors do not realise that their duties to a company change during, and as the company approaches, insolvency. This shifts the focus away from protecting the shareholders’ interests towards the creditors’ interests. The danger is that it is not clear when this twilight zone begins.
Considering the testing time that we are in, it is now more imperative than ever that businesses carefully document their decision-making processes through minutes of board meetings (also considering the impact of daily briefings from Number 10 and supporting expert advice from the company’s accountants and legal advisors); updated cash flow forecasts supplemented by the Government-backed loan and/or other stimulus support over a reasonable period; as well as any cash flow models or plans to return to profitability when ‘normal’ trading returns. All of this information may well justify the continuation of trade and assist any directors facing potential action from insolvency practitioners.
There are three risks that all directors need to be aware of and consider carefully – these are wrongful trading, fraudulent trading, and misfeasance
The liquidator or administrator has the power to pursue a director (including statutory director, de facto director, or a shadow director) for wrongful trading a. Those who exercise control over the company are at risk even if they are not formally appointed at Companies House, so it is not necessarily a defence to argue that a person exercising such control was not a statutory director.
To prove wrongful trading, it must be shown that at some point before the start of formal insolvency proceedings, the director knew or ought to have known that there was no reasonable prospect of avoiding an insolvent liquidation or administration; and that they failed to take every step to minimise further losses to creditors.
Indicators that a director should be aware of a company’s impending insolvency could include:
- company accounts showing liabilities exceeding assets
- proceedings against the company for unpaid sums
- failure to meet sales or cash flow targets or forecasts
- banks calling in or refusing to extend overdrafts
- suppliers refusing to make deliveries or provide services until outstanding invoices are settled.
The court has a wide discretion to determine the extent of a director’s liability when they are found guilty of wrongful trading, which is usually in the form of a financial contribution order. Where the court orders a contribution against a director, it also has discretion to disqualify that director, potentially for 15 years.
Fraudulent trading imposes liability where a company suffers loss caused by continuation of the business with the intent to defraud. The key difference between wrongful and fraudulent trading, therefore, is that liability requires intent to defraud creditors.
Dishonesty involving moral blame must be proved. Dishonesty is assessed on a subjective basis and only what the director knew or believed is relevant. There is therefore a higher standard of proof than for wrongful trading.
A director found liable for fraudulent trading can be ordered to make a financial contribution, which should compensate for the loss caused to the creditors. The court can also disqualify the director. Additionally, a person who is knowingly party to fraudulent trading can receive criminal sanctions, regardless of whether the company is being wound up. These sanctions can include imprisonment of up to 10 years; a fine; or both.
Misfeasance is a much broader offence and reflects the common law principle that a company can claim against its directors for breach of duty. It is, some say, a “catch-all” provision.
Misfeasance covers the whole spectrum of directors’ duties and therefore includes:
- misapplication of any money or assets of the company
- breach of statutory duty such as unlawful loans to a director or entering into transactions at an undervalue
- breach of the duty of skill and care.
A director found guilty of misfeasance must pay damages to compensate the creditors as a whole, and not any one particular creditor.
As is our continuing guidance during this difficult time the first step is not to make a snap decision. The Government has already committed significant resource to assist businesses during this period, most of which has already started or is likely to be in force during early April.It is highly likely that there will be more assistance to come.
In the face of the economic downturn, the need for directors to understand their duties – and how to fulfill their obligations and minimise potential liabilities – is increasingly important. However, it is possible that the Government may take action to relax the Insolvency Laws in view of the Coronavirus pandemic.
To find out more, click here to contact Kiall Bagnell.
Why the franchise agreement is so important
Franchise agreements are often compared to prenups, they are only reviewed when you want to get divorced! However, the franchise agreement is possibly the most important document in the franchise system. If the relationship between franchisor and franchisee breaks down or a franchisee is not compliant, the agreement plays an important part to make sure both parties are protected. It should set out what is expected of both parties from the outset and, most importantly, define their future relationship and set out the terms that will bind them for the duration of the franchise contract.
What should your franchise agreement include?
While there are no set rules on what should be included, the franchise agreement defines the legal relationship between franchisor and franchisee, and it should look to achieve three essential objectives:
1) The “grant” and general terms – It should clearly set out what is being “granted” and licenced from the franchisor to the franchisee, as well as the operating terms that apply to the grant;
2) The brand/ Intellectual Property (IP) – It should protect both franchisor and franchisee, the franchisor’s brand, IP and know-how; and
3) The rules- It should cover the rules the parties are expected to follow in the operation of the franchised business.
The “Grant” and terms
There is no special law for franchising, and if difficulties should arise the franchise agreement will determine what rights and obligations have been set out.
Below sets out what is expected from the “grant” and are also some essential operating terms that should be covered:
- The rights granted to and the obligations of franchisee – the licence to operate the franchised business;
- The rights either retained or granted to and the obligations of the franchisor;
- The goods/services to be provided to the franchisee (if any);
- Payment terms by the franchisee;
- The overall duration of the agreement;
- The franchisee’s use of the franchisors brand identity including trade name, trademark, signs, logos etc.;
- The procedure to renew the agreement;
- The conditions of terminating the agreement and what is to happen when the franchising relationship ends;
- The terms for if and when the franchisee can sell the operating franchise business and the franchisor’s pre-emption rights;
- The franchisor’s right to change the operating manual (the “rules” – referred to below) and franchise system.
The brand/ IP
The franchise agreement must have provisions in place to protect the franchisor’s brand (including trade name, logo etc.) know-how, system, the manual and confidential information. The Intellectual property rights set out how the franchisee can use trade names, trademarks, and copyrights.
It is in the best interest of both the franchisor and franchisee to ensure that no third party or ex-franchisee infringes these intellectual property rights and does not allow for any external use of trademarks, trade names or copyrighted materials.
All franchisees should ideally be treated as a family so there should be no room for favourites. All prospective franchisees should be offered the same terms with no special deals.
A franchisee is, therefore, invariably invited by the franchisor to “take it or leave it”. If a franchise agreement is not negotiable then it is crucial, from the franchisee’s point of view, that it is not only sound from a legal point of view but also workable in terms of the rights and obligations.
The vast majority of the rules will ordinarily be captured under the operating manual – something that you will not have access to until you have entered into the franchise agreement due to it being so confidential – it is, therefore, critical that access is granted to existing franchisees so that any prospective franchisee has the ability to assess how the franchisor operates, how the rules are applied and to understand how the “family” works.
When it comes to entering into a franchise agreement, there are many legal considerations to be aware of, not just covering the above. The franchise agreement is a crucial document in the relationship, and you should completely be understood before signing it.
To find out more, please contact Kiall Bagnell.
Started a new business in Lockdown? Do you need to consider your Intellectual Property?
For all of us, 2020 has been a unique year with many putting their lives ‘on hold’ throughout the UK’s first lockdown. During this period of self-reflection, it’s no surprise that many decided to turn their lockdown hobby, or their long-considered ideas, into a new business, as they finally had the time to make it a reality, but have you considered your Intellectual Property?
Starting a new business brings a lot of excitement but because it can be done quite quickly, it can sometimes mean that legal formalities, like protecting your Intellectual Property (IP) can be overlooked, which can leave you and your newly formed business at risk
We have put together a few tips to consider for people who have recently set up a new business in lockdown.
What is Intellectual Property?
Intellectual Property (IP) is an umbrella term used to describe a variety of legal rights that attach to certain types of ideas or information.
In order to protect what your business creates, increase your competitive position, and avoid infringing the IP rights of other businesses, there are a few things you should consider:
- Register your trade name– Ensure that you have protected your brand by registering your trading name as a trademark. This can be anything from your brand name, logo, product names, or packaging. By registering it you can distinguish and protect your products or services.
- Domain name registration– Register your domain name and the domain name relating to all potential web addresses you would like to be associated with your business to stay one step ahead of cyber squatters. For example .com, .net, .org etc.
- IP ownership– Ensure that your company is the owner of IP used by your business and that your company is the registered proprietor of any of its registered IP.
- Contract dealing with IP- Ensure that any contract dealing with your IP whether with customers, suppliers, contractors or employees, is carefully reviewed prior to signing.
Sometimes it may be necessary for you to prevent other businesses from trying to emulate your business, copy your trademarks, or pass themselves off as your business.