Legal Update - November 2008

Welcome to the October edition of Business Lawyers newsletter where we look back at legal developments over the last 4-5 weeks.

With the imminent opening of a Manchester hub of Business Lawyers we have been busy since last edition widening the geographical scope of our hub office offerings though we continue to remain true to our roots of being a virtual network as this enables us to pass on property savings to clients. More on this development next month but should you have any connections or leads in the area please do not hesitate to get in touch to see how we might work together profitably.

Of course as ever the law does not stand still as in October gone there have been a number of important changes to company law affecting all corporates-first of all with company names . The major change has been the creation of a Company Names Tribunal in which Company names adjudicators make decisions in disputes about opportunistic company name registrations. The Tribunal deals solely with applications (complaints) made under sections 69(1)(a) and (b) of the Companies Act 2006 which is to be distinguished from a “too like” company name objection. Opportunistic company name registrations share similar characteristics to opportunistic Internet domain name registrations (called cyber squatting). An example of an opportunistic company name registration is when someone registers one or more variations of the name of a well-known company in order to get the latter company to buy the registration(s). Another example might be where someone knows that a merger is about to take place between two companies and so registers one or more variations of the name that the newly formed commercial entity is likely to require. The registration(s) would be opportunistic in that the registration holder’s purpose in obtaining the registration was to cash in on the other entity’s fame. If you have been affected in this way feel free to give us a call to discuss.

Secondly there are broader company law changes that concern the directorship of a company as well as trading information that now has to be displayed and made public on premises, documentation and communications. The changes are detailed and wide ranging and cannot easily be summarised here but if you wish to receive a free podcast of the same please contact us .

Controlling shareholders of companies too are affected by a recent case decision which affects their status. It is often a contentious issue with employment tribunals and HMRC as to how controlling shareholders who are also directors of a company are treated. We also deal with similar shareholder issues ranging from buy outs of shares to shareholder agreements and disputes. In this case it was held that Mr Clark (who brought several claims before the Employment Tribunal (ET), including a claim of unfair dismissal, after he was dismissed from the construction business that he had established) could not gain employment protection as an employee. Whilst he was the controlling shareholder, his status was alleged to be that of an employee, although he did not have a formal written contract of employment. He received a very small “salary” but his living expenses were met by loans from the company. However the EAT looked at eight relevant factors in deciding the employment situation and in this instance concluded on balance the ET had been entitled to reach the decision it had. Such a decision does not of course preclude other controlling shareholders arguing successfully they are employees as the relevant facts are always key to any tribunal or court decision.

1st October was an important date too for trademarks and trademark objections as there were a number of sweeping changes to the system including a shorter period to object to new trademarks which on the one hand benefits business if you are the prospective trademark registrant but is less favourable if you hold an existing trademark as you will now need to be quicker off the mark to object. Some useful pointers from UK IPO may be found here .

Whilst there have been increases in the minimum wage there has also been pressure by Labour backbenchers to amend the law on tipping as reported by us in a previous newsletter. The latest developments see proposals on this front which is set to impact hard on certain restaurant and hospitality operators that have underpaid staff, though for many this change in law comes not before time.

Meanwhile as the recession is beginning to take an ever increasing hold on the business community-see here -we see the old adage that a problem for some represents an opportunity for others with some businesses doing well out of the downturn-insolvency practitioners and debt collection agencies for one. We ourselves have noticed an upturn in commercial litigation enquiries from clients concerning non-payment and late payment of invoices and are able to assist by way of our experience in handling such claims by way of our correspondences and then if necessary small claims/fast track procedures in the county court.

If you have a client or customer who is not paying and this has exhausted your goodwill and patience why not outsource such debt handling matters to us? In tough times it makes sense to ensure you have good cash flow and we shall be delighted to assist you in whatever way can to help you ensure your business survives the downturn.

That’s all for this issue. Wishing you the best and will be in touch again soon.

Kind regards,


Brian McLelland

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