Every business relies upon contracts to provide certainty about obligations and clarify business relationships whilst affording protection against risks. Our solicitors can provide you with effective advice at all stages of your business.
Our clients include start ups, individuals, medium sized companies and plcs.
You may be starting out and need legal advice on company formation or partnering agreements. Or if you are growing your business and looking to start a franchise we can assist with a wide range of issues.
If you need a contract for your business in Cheshire to be drafted or amended we can offer the full range of legal services including:
- Terms and conditions of business
- Setting up a joint venture
- Agency, distribution and franchise agreements
- Cross-option agreements
- Business Sales
- Business Purchase
- Consultancy agreements
- Credit and consumer agreements
- Partnership agreement
- Public sector tendering and EU procurement law
- Business acquisitions
- Banking and Finance
- Commercial contracts
- Commercial negotiation
- Company Law
- Competition Law
- Corporate governance, including directors’ duties and liabilities
- Deal activity
- Legal opinions
- Merger and acquisitions
If your requirement is for company or corporate legal services in Cheshire again we can offer the full range including:
- Company formations
- Company sales and acquisitions
- Company secretarial services
- Investment agreements
- Shareholder agreements
Terms and Conditions for Business
Businesses use standard T&Cs for many reasons. Many businesses use standard T&Cs without appreciating their importance. Frequently, businesses do not enter into written agreements or may take agreements from elsewhere. It is essential for businesses to use written agreements where possible and to adopt written terms that are pertinent to their business.
Importance of standard terms and conditions
Standard T&Cs, if used correctly and properly incorporated, are vital to income generation. They should form the basis of all contracts and provide a framework for day to day operations as well as protection in contractual matters. Businesses can sometimes overlook their standard T&Cs. Individuals within a business find themselves using standard terms because they are there without necessarily understanding their meaning or impact.
Problems often arise because by the time the standard terms are considered, a dispute has occured and the contract will already have been formed on the terms set out in the standard terms. At this stage it is often too late to challenge the standard terms . On occasions the need to secure revenue quickly may lead to reduced, or no legal involvement in the contracting process. This can lead to some of the following issues:
- Standard terms not being properly incorporated
- Terms being out of date
- Terms being inappropriate for business needs, or
- Disadvantageous unenforceable contracts
The above issues may expose businesses to some of the following risks:
- being subject to the other party’s T&Cs, which may be more robust and onerous
- unenforceable provisions being contained in the standard terms, or
- unnecessarily binding the business to inappropriate terms.
Drafting a robust set of T&Cs tailored specifically for your own business which is pertinent for your industry is often an effective way to minimise the risk of problems arising and can appropriately manage your exposure to any liability.
Cross Option Agreement
The death of a shareholder can have a major impact on the running of a private company, particularly where there are few shareholders and those shareholders are also directors, who are intimately involved in the running of such a company.
Typically, it will be undesirable for the shares of a deceased shareholder in such a company to be transferred under the provisions of a will to their family members, or indeed any other third parties. A transferee may be inexperienced in business and have no desire to become involved in the company.
Therefore, to avoid a new, unknown shareholder being introduced in to their midst on the death of an existing shareholder, the shareholders of a private company may all choose to enter into a cross-option agreement. The purpose of the agreement is to provide a mechanism for the transfer of the legal and beneficial ownership of each shareholder’s shares in the event of their death; it ensures that their fellow shareholders have the opportunity to purchase those shares before they are transferred to third parties.
Each shareholding will be subject to a call option and a put option:
- a call option, being a right (but not an obligation) of the remaining shareholders to purchase the deceased shareholder’s shares from his personal representatives; and
- a put option, being a right (but not an obligation) of the deceased shareholder’s personal representatives to require the remaining shareholders to purchase the deceased shareholder’s shares
- It is important to ensure that the options are drafted as rights rather than obligations in order to avoid the transfer of shares on the death of the deceased shareholder being deemed to be subject to a binding contract for sale. If the transfer is deemed to be subject to a binding contract for sale, it will be treated as being a transfer of cash for inheritance tax purposes.
Setting up a Joint Venture
There are a number of intial considerations that parties to proposed joint venture should address before entering into formal legal documentation. These include:
- which structure to use for the joint venture – possible joint venture structures include corporate joint ventures; partnerships (limited, limited liability or unlimited), or a joint venture based on contractual relationship
- the parties’ respective interests in and contributions to the joint venture
- the accounting and taxation treatment of the joint venture
- whether any legal requirements must be complied with before the joint venture can be established
- preliminary documentation such as confidentiality agreements, exclusivity agreements heads of terms and business plans, and
- due diligence
Initial legal requirements
In many joint ventures, there are a number of legal requirements that the parties are legally or commercially obliged to address before entering into a formal completion of the joint venture. These could include:
- obtaining merger clearance where EU or UK merger control applies
- obtaining industry specific approvals, eg approvals for transfers of businesses or subsidiaries if a regulated industry such as financial services is involved
- shareholder approval
- complying with an employee consultation process
- in relation to business transfers, obtaining consents for novation of major contracts
- obtaining tax clearances in relation to proposed transfers
- obtaining consents in relation to existing financing arrangements, and
- a requirement for a party to announce the formation of the joint venture (e.g. if the party is listed and the proposed joint venture constitutes inside information)
Max took the time to listen to what I thought I needed; helped me to understand what I actually needed to safeguard my business and how it pertained to my industry. I would not hesitate to recommend Max and Tebbitts & Co to anyone for advice and the establishment of business specific terms & conditions of trade.
Fergus Wiseman of Jagseven Ltd