Clarke and Son News

The Pensions Act 2008 contains provisions which will make it compulsory (from 2012 for larger employers and 2015 for smaller employers) for an employer to enrol qualifying workers aged between 22 and the state pension age who earn more than a de minimus account (currently set at £5,035 per annum) into a pension scheme and to make contributions to the scheme.

On 9 December, the Chancellor announced that there will be some concessions to the rules for new businesses and ‘micro businesses’ which will mean some employees may not have to be enrolled into a pension scheme until 2016. Details of the implementation plan are expected to be announced imminently.

Under the provisions, the employer will be required to contribute a minimum of three per cent of salary. The employee will be required to contribute a minimum of four per cent salary, up to a maximum amount.

The provisions will be phased over four years, at the end of which (from year five onwards) the combined employer and employee contribution must equal at least eight per cent of salary.

There will be substantial fines for failure to comply with the new regulations.

Clearly, there are likely to be many changes between now and the planned implementation dates, but this is a good time to start thinking through the potential impact of the new regime on your business.

For more information, please contact Paul Cowdery on Tel: 01256 320 555.

The Health and Safety Executive (HSE) has published Asbestos: The Survey Guide, which provides guidance on asbestos surveys and includes information on the dutyholder’s use of survey information.

The guidance has been prepared to help those responsible for managing the risks from asbestos best protect those workers who may disturb it.  It will:

• Help people who carry out asbestos surveys and those with specific responsibilities for managing the risks from asbestos in non-domestic premises under regulation 4 of the Control of Asbestos Regulations 2006 (CAR 2006).
• Provide guidance in situations where surveys may be carried out for other purposes, for example for managing asbestos in domestic premises under wider health and safety legislation and for meeting the requirements of the Construction (Design and Management) Regulations 2007 (CDM).

The guidance is aimed at those who commission asbestos surveys, the surveyors who carry them out and those who use the surveys, such as architects and demolition or removal contractors.

For more information, please contact Charles Marchant-White on Tel: 01256 320 555.

The High Court has confirmed that a Solicitor’s Undertaking is something that the party to whom it is given should be entitled to rely on absolutely.

The decision reaffirms the importance of Solicitors’ undertakings in the conveyancing process and emphasises that undertakings should always be appropriately qualified and unequivocal.

A buyer that accepts a solicitors’ undertaking should be entitled to rely on it knowing that the solicitor will be compelled to comply with its terms.  If solicitors were able to delay complying with their undertakings because of  a dispute with a third party (save, perhaps, in very exceptional circumstances) it would undermine the sensible conveyancing practices that have evolved over time.

 For any queries on all services offered by Clarke & Son Solicitors, please email us or Tel: 01256 320 555

The Workplace Parking Levy (England) Regulations 2009 will come into force on 1st October 2009. Local authorities in England (excluding those in Greater London) will decide whether to introduce a workplace parking levy (WPL) scheme and details of how it will operate will be their responsibility. By imposing a levy on the amount of workplace car parking provided by employers and educational establishments, it is hoped that car commuting will reduce in favour of alternative means of transport (including car-sharing).

The Regulations, made under the Transport Act 2000, do not specify charging levels, exemptions and discounts which it is considered are best left to the local authority to decide in the light of local circumstances. The Department for Transport will be preparing guidance on the issues to be taken into consideration by authorities when developing a WPL scheme. No WPL scheme is expected to come into operation until 2011 and no levy is expected to be collected before April 2012. The impacts will be reviewed two years thereafter.

For information on Company Law, please contact Charles Marchant-White or Tel: 01256 320 555

The Tribunals, Courts and Enforcement Act 2007 (TCEA 2007) contained provisions on a wide range of topics, including tribunals and inquiries, judicial appointments, enforcement of judgments and orders and debt management.

Part 3 of the TCEA 2007 replaces the ancient remedy of distress with a new system of commercial rent arrears recovery (CRAR). The Law Commission recommended that there should be a delay of six months between the TCEA 2007 receiving Royal Assent (19 July 2007) and the provisions relating to CRAR coming into force, to allow landlords time to become familiar with the changes.

On 17 March 2009, the Justice Minister made an announcement in Parliament on bailiff and enforcement law, but the announcement made no reference to CRAR. This has been queried informally with the Ministry of Justice which has advised that the Government also intends to implement CRAR in April 2012.

For more information on landlord and tenant issues, please contact Paul Cowdery on Tel: 01256 320 555

The Companies (Trading Disclosures) Regulations 2008 came into force on 1st October 2008, making many changes to the requirements as to where and when company trading names, names of directors etc. need to be shown.  

In particular, the new regulations specify that every company shall disclose its registered name on: 

• business letters, notices and other official publications;
• bills of exchange, promissory notes, endorsements and order forms;
• cheques purporting to be signed by or on behalf of the company;
• orders for money, goods or services purporting to be signed by or on behalf of the company;
• invoices and other demands for payment, receipts and letters of credit;
• applications for licences to carry on a trade or activity; and
• all other forms of its business correspondence and documentation.

In addition, it requires that every company shall disclose its registered name on its website. 

If you require advice on compliance with any aspect of company law, please contact Peter Turner on Tel: 01256 320 555.

The proposed set of rules for ‘pre-pack’ administrations (where a company goes into administration with the prospective purchaser already in place and the sale effectively a ‘done deal’) has been given the thumbs-up by insolvency practitioners and came into force on 1st January 2009.

The main advantage of a pre-pack is that the company in difficulty can continue to trade without interruption. It is argued that this allows the best price to be realised for the company. It is also argued that it allows the administrator to avoid many expenses that would normally be incurred during the period in which a buyer is sought, thereby reducing the risk to other creditors of receiving a smaller dividend. In addition, pre-packs are claimed to reduce the likelihood that the business will be put into liquidation. 

However, pre-packs have a number of opponents, including HM Revenue and Customs (HMRC), which often face a shortfall in VAT, Corporation Tax and/or PAYE when a company enters administration. HMRC have opposed a number of pre-packs in court, with varying success. A more recent alleged tactic involves the denial of VAT Registration Numbers to companies engaged in setting up a pre-pack. The rule book will go some way to ensuring that pre-packs are dealt with in a consistent and ethical way. 

If your business is in financial difficulty, contact Peter Turner  on Tel: 01256 320 555

A great deal of publicity has been given by national newspapers recently on ‘house competitions’.  There have been cases where the Gambling Commission have ruled that the scheme in question is, in effect, a lottery, with a house as the prize.   More and more people, unable to sell their homes in a falling market are contemplating using such competitions as an alternative.

Keith Hathaway, Senior Commercial Solicitor at Clarke & Son LLP comments:
“If you are a House Seller or Company Director wishing to set up a promotional prize draw or competition you need to be aware that the law draws a sharp distinction between lotteries, free draws and prize competitions. 

A lottery is essentially any scheme where prizes are allocated randomly to participants who have paid for the chance of winning a prize. Lotteries are illegal unless sanctioned by a specific statute (e.g. the National Lottery) or by a licence from the Gambling Commission under the Gambling Act 2005. The Gambling Commission will not give permission unless the proposed lottery is for a good cause- i.e. they only give permission to charities or community organizations.  So lotteries for private or commercial gain are invariably illegal. 

Prize competitions are legal as long as they are not lotteries in disguise. There must be skill involved. The amount of skill that participants will be expected to exercise will vary from competition to competition. The element of skill must not amount to betting. The law on this topic is complex.

Free draws are familiar from product promotions. They do not fall foul of the Gambling Act 2005 as long as they are not lotteries in disguise- there must be no payment necessary in order to participate. Again, the law about this is complex particularly on the question of what amounts to payment to participate. A (genuine) free prize draw might be an appropriate means of promoting your business products but it would not be a viable solution if you wanted to sell your house for value.

Even if a prize competition or free draw is not in danger of infringing the Gambling Act 2005 there are other legal requirements that must be observed. It is always wise to take legal advice when planning a prize competition or draw whether for product promotion or any other purpose.

In summary, a house sale by a multiple ticket scheme would only be lawful if it is a prize competition, it is accepted as such by the Gambling Commission and does not infringe any other relevant rule. If the scheme is a lottery not a prize competition (or free draw) or the Gambling Commission decide that it is a lottery, then it will be illegal.  A prize competition scheme must not be such that it constitutes betting.  If clients are in any doubt of the legality of a proposed scheme, they should contact us for further advice.”

If you would like legal advice on how to promote your products or  sell your house through a prize competition, please contact Keith Hathaway or  Paul Cowdery or contact them at Tel: 01256 320 555

On 1 October 2008, the Companies (Trading Disclosures) (Insolvency) Regulations 2008 came into effect bringing insolvency law into the Internet age.

The Regulations requires that a UK company that’s in administration, receivership or operating under a debt moratorium to indicate the fact clearly on its website as well as on company documentation such as its letterheads, invoices and so on.

October 1st saw a raft of new laws that came into force across the UK. The following are a selection of the new laws concerning changes of regimes for running a business.

1. Minimum age for appointment as director

Section 157 of The Companies Act

With just a few exceptions, all directorships held by a person who is under the age of 16 will automatically end on 1st October 2008. The need to inform the Registrar of Companies will no longer be required although company records should be amended.

If, as a result of the change, the company is left without a suitable director, then at least one new director will need to be appointed to address the position.

2. Limited companies as sole directors

Section 155 of The Companies Act

From October 1st, limited companies are required to have at least one human director. This new rule is designed to restrict a limited company from acting as the sole director for another limited company.

There is, however, a grace period (up to 1st October, 2010) for companies who had a sole corporate director in place on 8th November 2006 to comply.

3. Financial assistance for private companies

Chapter 2 of the Companies Act

From October 1st, privately owned companies can use financial assistance in order to acquire their own shares. This process effectively removes the need for a private company to undertake the ‘whitewash’ procedure (which required a directors’ statutory declaration of solvency, an auditors’ report and a special resolution of the company). However, where the private company has a public company subsidiary, the public company will not be afforded the benefit of this rule.

4. Disclosure in annual returns for private and non-traded public companies

The Companies Act 1985 (Annual Return) and Companies (Principal Business Activities) (Amendment) Regulations 2008

Businesses whose annual returns have a ‘made up date’ on or after 1st October 2008 are no longer required to disclose the addresses of the shareholders of private and non-traded public companies.

Importantly, any company including the address of shareholders where this isn’t necessary will have its annual return rejected by Companies House. The addresses of shareholders in publicly-traded companies who hold at least 5% of any share class will, however, still need to be provided.

5. Directors’ duties: duty to avoid conflicts of interest

Section 175 of the Companies Act

With effect from October 1st, company directors will be under an express duty to avoid conflicts of interest. This new rule will let companies put provisions into their constitutions to allow for the prior approval of conflicts (or potential conflicts). If a director complies with any such provisions then they will be free themselves of any liability for breach of the duty.

Additionally, the duty extends to not accepting benefits from third parties where any possibility of a conflict of interest may arise.

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If you are a business owner looking for highly qualified, professional advice regarding business law and how may affect you, please contact Clarke and Son LLP or telephone 01256 320 555.