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ESTABLISHED IN 1809 AND CELEBRATING OVER 200 YEARS IN HINCKLEY
GOODBYE TO HOME INFORMATION PACKS (HIPS) - 20 May 2010
Good news for Sellers!!
The Government have today announced that the requirement to have a Home Information Pack (HIP) before selling residential properties has been suspended with immediate effect. This means that Sellers can once again market their property immediately and without incurring the additional cost of obtaining a HIP.
However Sellers will still be required to commission, but won't need to have received, an Energy Performance Certificate (EPC) before marketing their property. It will now become the legal responsibility of the Seller and not the Agents to ensure an EPC is commissioned before commencing marketing. The Seller or the person acting on their behalf has a new duty to make reasonable efforts to secure an EPC within 28 days.
NEW INTESTACY RULES
From 1 February 2010 new intestacy rules apply. “Intestacy” means who inherits if you leave no Will. The law decides. In almost every situation it is better to make a Will. It is rarely sensible to write your own Will as the rules are complex. Two witnesses must sign in the presence of the person making the Will at the same time, and there are other legal complications. Get it wrong and the Will is invalid.
Matthew Healey who heads our Probate, Wills and Trust Department says:
“If there is no Will but a spouse (or civil partner) and children are left, the spouse now keeps all the assets up to £250,000 (up from £125,000) and in addition own all the personal chattels (possessions) whatever their value. Over £250,000, half of the remaining assets go on trust for the surviving spouse and the children receive the other half. Therefore someone dying leaving a house worth £1m and no other assets, for example, would find that their spouse has to sell the house to give the children half of £750,000 immediately. If they make a will they do not have to do this. On death of the surviving spouse in such a case, the half on trust goes to the children.
If someone dies intestate and there are no children but there are siblings of the deceased, then the spouse receives chattels - £450,000 (up from £250,000 under the previous law) and half the remaining assets immediately go to the siblings with the balance on trust for them after the spouse’s death.
Now might be a good time for you to make or update your Will.
In addition, if you live with a partner and are not married or in a “civil partnership” with them, they have no rights to inherit although they may be able to bring a claim under the Inheritance, Provision for Family and Dependents Act if you were supporting them. If you wish a partner to inherit, it is simpler to make a Will which sets out your wishes expressly. It may also be wise to have a written agreement about how any properties you jointly own will be handled if the relationship breaks down. This is also wise for those buying a property together who are not also in a relationship.
Call Matthew Healey on 01455-610747.
SORTING OUT YOUR LEGAL AFFAIRS IN 2010
How is your personal legal housekeeping? A new year is a good time to make some legal resolutions. Make your will. Ensure property is in the right names. Even consider a pre or post pre nup. Enter into contracts with business partnership and shareholders rather than operating on trust. Introduce some standard terms of sale and purchase into your business.
Tom Flavell our Managing Partner says:
“Our private clients are not always up to date with matters such as making a Will. Although the government is looking at changing the law to give better rights on death to cohabitants who are not married, those changes are not yet in effect and many people believe common law marriages are legally recognised. They are not. However you can protect your position through a well drawn up Will and other legal documents. It may be that you want to ensure that if you die your live in partner does not inherit but your children from a previous marriage will do so and if the law may change in this field to give new rights to a partner you may want to ensure you write a Will now to make it clear who will inherit.
Another sensible precaution before moving in with a partner, or before or during marriage or a relationship is to agree in writing about certain important financial matters. If one partner moves into the home of the other, will the property go into joint names? Will the parties have equal shares? If, before marriage, one partner has substantial assets and income they may want to protect if they divorce, it may be worthwhile after the recent court recognition of a foreign law pre-nuptial agreement (in the Radmacher case) to have lawyers draw up a pre-nuptial agreement. It may not always be watertight but it is likely the court will give some consideration to such documents, particularly if both parties have had legal advice and the terms are reasonable. We can help you draw up such documents.
If you are concerned about losing capacity as you get older, it may be sensible to draw up a Lasting Power of Attorney setting out how your affairs will be managed if you lose legal competence, such as through Alzheimer’s or dementia. Again we can help you draw up the relevant documents. Looking at your tax position before the end of the tax year on 5th April is also wise. You may have tax allowances to use and seek methods lawfully to reduce the impact of inheritance tax were you to die. Call us for help in all these areas.
YOU AND YOUR BANK CHARGES
Your will have noticed the press coverage of the decision of the new Supreme Court (formerly House of Lords) about bank charges. The Unfair Terms in Consumer Contracts Regulations 1999 were the law in question. They state that unfair contract terms in contracts with consumers will be unfair and void. However, they specifically say the price cannot be challenged as unfair.
David Boon, one of our Partners says:-
“The Supreme Court held that an overdraft charge is part of the “price” so therefore because of the way the regulations and the EU directive on which they are based are drafted, the clause could not be challenged under those terms. This means that the 42 million UK bank users who do not overdraw without permission will not need to subsidise those who breach their contracts with their banks. Over 30% of retail banking revenue comes from unauthorised overdraft charges so there was much at stake in the case. However, the legal issue was simple – an overdraft charge is part of the price and so the regulations clearly state it cannot be subject to challenge. It is expected that the banks will now apply to strike out the many claims consumers have brought before local county courts, in the light of the decision. "
However, if you wish to discuss your own case with us we would be happy to advise you as to what you should now do. It may be that there are other terms in your own situation which are unfair and it is by no means clear that all cases will fail. In addition, it is possible that the Office of Fair Trading may now make a sectoral investigation of the banks.
Call David Boon on 01455-610747 for further information.
ALL CHANGE FOR COMPANY LAW
1 October 2009 was the final D-Day for changes in Company law under the Companies Act 2006, the largest statute in English legal history.
Tom Flavell our company and corporate law partner says:-
“Although it has been a long time coming many businesses are not properly prepared. These last changes are very important. The key changes are twofold (i) to procedural matters, forms and the like and (ii) changes to fundamental legislative areas such as articles of association and share capital. When a company changes its share capital it now needs to produce a document called a ‘Statement of Capital’ which must be filed. The concept of authorised share capital has been abolished”.
The changes are positive. Removing for all companies, old and new, provisions from the Memorandum is sensible modernisation. We have been helping businesses who want to do so to update their Articles, adopting the best of the new regime and now is a good time to do so as the changes are all in effect. The Memorandum which every company in the land has as part of its constitution becomes almost a historical document. The changes to share capital rules are also a welcome development and the new Model Articles for companies incorporated after 1st October are an improvement on Table A.
Many businesses are unaware that the Act has removed the need to hold an annual general meeting and to have a company secretary although many will find their articles of association require this and they want to retain a company secretary in any event. However, thought should be given to what is best for a particular company. It may be wise for many to adopt the new Model Articles of Association and we can help companies keep up-to-date with these changes. Some of the new changes only apply if the existing Articles do not restrict them so now is a good time to revise Articles.
Call Tom Flavell on 01455-610747 for further information.
BUYING AND SELLING A PROPERTY
If you are considering buying a property, do consider recent changes in the law in this area. For those buying a commercial lease a recent case of landlord who informed a tenant he intended to redevelop a property and then later changed his mind was liable for damages.
Jamie Connolly a partner and property specialist with the firm says:
“We can advise on service of notices required under property law in such cases and ensure you comply with the law. Plenty of local businesses buy a long lease on their shop or office without taking proper legal advice on its terms and then find they are personally liable, not just their limited company, as they did not read the paperwork properly or otherwise are tied up in ways they do not like. The Landlord and Tenant Act can be a bit of a minefield."
If you are proposing to move house we can also help you with the legal side of things. Watch out for properties owned in joint names. Recently the court said that what are called the “beneficial” interests in property bought in joint names could change because of big changes in circumstances. The property was originally owned 50/50 but the court held this had changed to 90/10.
We can advise you on all aspects of property law. It is now possible to set out at the Land Registry when you buy with someone else what percentages you each hold of the property and you may wish also to have a written agreement between the parties who jointly own the property as to their respective shares, which should be kept under review.
Call Jamie Connolly or Chris Stratford on 01455-610747 for further information.
Employment Law Changes
Employment law is changed twice every year and 1st October is the latest date for changes. David Boon our emloyment partner says “It is a good time of year to check you are compliant with employment law. We have had a run of cases where clients terminate employment of employees and perhaps are justified in doing so but do not follow the correct procedures and lose out in consequence, so always take early legal advice.
As for the new changes the new National Minimum wage rates are:
• £5.80 an hour for adults (workers aged 22 and over) – the current rate is £5.73
• £4.83 an hour for workers aged 18 to 21 inclusive – the current rate is £4.77
• £3.57 an hour for young people – the current rate is £3.53
There are also new rules on employing children – see the The Department for Children, Schools and Family - Guide on Employing Children, which deals with what work children may do, number of hours they may work and health and safety requirements. Few will have missed the press coverage on the rules (i) having to vet parents and others helping at school events and (ii) the furore over care for under fives for “reward”. The rules are complicated so check with us to ensure you are compliant.
Another interesting change is that the European Court of Justice has said that if your holiday is spoiled because you are sick you can still claim your holiday once you are back to work. The Court said that if an employee "does not wish to take annual leave during a period of sick leave, annual leave must be granted to him for a different period". They would of course need proof of the illness.
There have also been plans published by the Government to improve paternity leave rights. Women who go back to work after six months having had a baby can transfer their six months unused maternity leave to their partner. However, as before, it is only the first six weeks which are at 90% of pay and thereafter in the first six months the rates are merely the low statutory maternity pay rates for the rest of the mother’s initial six month period and unpaid thereafter. The change for men means they would obtain three months paid at the SMP rate and three months' unpaid leave. At present they receive at most 14 days. The aim is to bring the changes in before the next election.
Call David Boon on 01455-610747 for advice on any of these areas or if you have an employment legal query.
Assisted Suicide
Many of our local private clients wrestle with legal issues over elderly relatives and their wishes. We can advise on writing a “living will” setting out how someone might prefer to be treated as they become less competent and we can draw up a Lasting Power of Attorney to deal with other legal matters.
Matt Healey a partner in Thomas Flavell & Sons says:-
“The House of Lords’ final decision before it becomes the Supreme Court after the summer break, was an appropriately historic decision in the case brought by Debbie Purdy. The court decided that the Crown Prosecution Service must produce guidelines on when relatives and friends might be prosecuted if they provide assistance to those who might wish to commit suicide. Assisted suicide is a crime punishable with up to 14 years in jail in the UK although no one has ever been prosecuted so far for aiding a suicide abroad."
If you have any legal issues about your own right to die, care in old age, power to manage your affairs or those of a relative contact Matt Healey on 01455-610747 for further information.
Industrial Noise Claims
Have you been damaged at work? You may be able to bring a personal injury claim. In May 2009, the Court of Appeal reached an important decision in an industrial noise test case.
A lady worked for 20 years in a hosiery factory packing stockings and developed hearing problems. The noise was at lower levels than is usually accepted for liability. However the court found that the employers were liable under s.29 of the Factory Act 1961 for damage to hearing. The companies ought to have measured the noise at their factories. The judge said:
“I am quite satisfied that an area where the ambient noise was 85 decibels would have seemed noisy to anyone entering it. The respondents to this appeal would also have discovered that they had some workshops where the noise levels were less than 90 decibels but were in the range between 85 and 89. The department where Mrs. Baker worked was one such.”
David Boon our litigation and personal injury partner says:
“The court found that employers were under a statutory duty to do what was “reasonably practical” to eliminate the risk of harm. Ignorance of the law was no defence. Ear protectors could easily and cheaply have been provided. In addition, companies were liable at common law for negligence for hearing loss from January 1988. The lady won damages of £3,334. Proving causation, however, still remains an issue. If hearing loss is not related to work then of course no claim can be brought."
If you believe you have a personal injury claim call David Boon on 01455-610747 for further advice.
Chris Newton retires - 31 March 2009
After 43 years with the firm Chris Newton has decided to retire. Fortunately he will not be cutting his links entirely with the Firm but will become a Consultant to the practice offering continued advice, encouragement to all and stepping in to mind the shop (so to speak!) during holiday periods. The Partners and Staff wish him a very happy and well deserved retirement.
Warning: Unsigned Contracts Are Binding
Do you ensure all your commercial arrangements are set out in writing? If not now might be a good time to have a written agreement drawn up.
Check you have standard conditions of sale, purchase, written agreements with consultants, suppliers, customers and the like. Long term distribution and agency agreements should ideally be in writing too and far too many of those doing business together as partners or shareholders fail to draw up a written partnership or shareholder agreement.
Tom Flavell a corporate and commercial partner in Thomas Flavell & Sons says:
In a recent case the courts looked at unsigned contracts. A Mr.Grant and Mr. Bragg formed a company together but decide to abandon this when Mr. Grant was ill for some months. They had a draft written agreement over their shareholdings produced by a law firm. Grant objected to it but eventually by email said he accepted it, although nothing was signed.
The court said:- "Whilst there might have been scope for argument as to the terms (but not the price) on which those shares were to be acquired, that scope was put to rest when Mr. Bragg and Mr. Grant agreed to abide by the terms of the Dixon Ward Draft," said the ruling. "What was needed on 30 January 2007 was mere regulation of the de facto position as it existed on the ground… Where parties are proceeding in anticipation of execution of a formal document then the normal inference will be that the parties will not be bound unless and until both of them sign that document," the court said. "However, that inference will change if the facts change so that it can be objectively ascertained, on a balance of probabilities, that the continuing intention of the parties is, now, to be contractually bound immediately and not following formal execution of the document." In other words if people act as if a signed contract were in place even though signatures were never placed on it, particularly if they have indicated by email that they agree then they will be held to it by the law.
When Mr. Bragg made an offer to Grant to accept the draft contract after he had changed the locks on the company's premises and shut Grant out of access to his company telephone and email…"Mr. Bragg had taken control of the Company and, effectively, forced Mr. Grant into resigning as a director (so taking all the benefit of Mr. Grant's shares except the very shares themselves)," said the decision. "The e-mail of 30 January 2007 was a clear attempt to resolve a difficult impasse. Nowhere does it require Mr. Grant formally to execute the Dixon Ward Draft [the unchanged contract]. It merely requires him to accept the Dixon Ward wording. If he did, in my judgment a contract would be in place on the terms of the Dixon Ward Draft," it said.
If you would like us to draw up written contracts for you to protect your business in recessionary times call Tom Flavell on 01455-610747
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Employment Law Changes Come into Force
On 6th April 2009 important changes to employment law came into effect. Sadly many of firms are in the process of releasing staff sometimes by reason of redundancy at present and the rules on this have changed.
David Boon employment partner at Thomas Flavell & Sons says:
“The Government has scrapped its statutory grievance and disciplinary procedures from 6 April 2009 – rules introduced in 2004 which required very particular steps to be gone through before dismissing an employee. This meant even if it was fair to dismiss the individual, if the rules were not exactly followed, payments had to be made to the employee in compensation. Instead of leading to fewer tribunal disputes, the 2004 rules led to more. Instead, now, ACAS has published a Code of Practice to take the place of the 2004 rules. It is not compulsory to follow the code, but failure to do so can be taken into account by employment tribunals, and they may increase pay outs by 25% if the code is not followed.”
Another change, this one from 1st April 2009 is on holidays. The statutory minimum annual leave entitlement has gone from 4.8 weeks, or 24 days, for those on a five day week, to 5.6 weeks, or 28 days. So full time workers are now entitled to 28 days’ holiday a year including a bank holiday (which at present works out as 20 working days and 8 bank and statutory holidays).
Also companies will be penalised harder (including an automatic £5k fine) if they do not pay the minimum wage.
Also, all employees since 6th April 2009 can request flexible working to care for children under 16 (currently limited to the under 6 or disabled children under 18). This is not a right to work flexibly. As before, it is merely a right to request it, but employers must follow procedures and give it due consideration.
Finally statutory maternity pay increases on 6th April from £117.18 per week to £123.06. Statutory sick pay increases from £75.40 to £79.15.
If you need any advice on employment law and dismissal and redundancy whether as employer or employee call David Boon on 01455-610747
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Probate – dying without a will – Legal Changes
Far too many people do not make a will and do not realise that without a will their assets are left in accordance with a formula determined by the state. From 1st February 2009, spouses and civil partners (where there are children and who die without a will) now inherit the first £250,000, not the first £125,000 as now. For many people whose assets are under those levels the result is that the spouse receives all the money from the estate.
Matthew Healey a partner in Firm says:-
“Where there are parents or siblings, but no children, the first £450,000 now goes to them, not £200,000 as before. If the estate is worth more than the statutory legacy, the remainder is divided between the spouse and children or, if no children, between the spouse and parents or siblings. If the deceased leaves children, half of the remainder is paid directly to the children and the spouse will take a life interest in the other half. So the spouse receives any income generated by the half in which he or she enjoys an interest for life. When the spouse dies, the capital sum passes to the children. If there is a spouse but no surviving children, half of the remainder is paid directly to the closest relatives, and the spouse takes an absolute interest in the other half. The change reflects increasing inflation since the figures were last set in 1993. However, people are far better off making a will so that these rather arcane rules are not imposed on their families after they die”.
For more information relating to these probate changes contact Matt Healey on 01455-610747 .
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Employment Law - Looking Ahead
A range of employment law legal changes, that were to be shelved because of the economic crisis, are now likely to go ahead in the new year. Peter Mandelson announced the proposed legal changes, including the extension of the right to request flexible working for those with children up to age 16. At present, the right to make a request is available where a person has children up to the age of six. The extension is due from April 2009. There may, however, be a postponement of the proposed extension of maternity leave from 39 to 52 weeks and the creation of an extra bank holiday.
David Boon a partner in Thomas Flavell & Sons says:-
"With markets in such turmoil, the Government is seeking to give stability to businesses and it is worth checking with all proposed legislation which aspects of it will now proceed. However, the EU has just announced a consultation on maternity rights which proposes some major changes so, whatever the results of the current UK review, employment law will always remain a fast moving legal field and a minefield for employers.
The proposed EU changes include an extension of paid leave. At present in the UK maternity pay is at 90% of pay for the first six weeks and then at a level around that of sick pay for the rest of the period. The plan is that a much longer period at almost full pay may be given, as well as prohibiting women from working for 6 weeks after ceasing work, although these measures are being vigorously resisted by many. At present in the UK, women if they choose can return to work after 2 weeks (or 4 if they are factory workers).
If you need any advice on employment law changes call David Boon on 01455-610747
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Business Protection in Recessionary Times
Businesses are fighting fires on many fronts in the current economic climate. Banks withdrawing overdraft facilities and other funding is not helping and some suppliers, such as Tesco, have announced they will pay non-food suppliers within 60 days not 30 days to help fund the expensive Christmas period. Conversely, some suppliers to large high street chains are trying to tighten payment periods, and indeed, demanding cash up front.
What can a business do to assist itself from a legal point of view in the current climate?
Tom Flavell who heads the Firm’s Company/Commercial Department says:
1. Investigate how watertight existing contracts are - can they be terminated at will or on long notice periods? Can prices be raised contractually or are they fixed? Are there any written terms and conditions, and if not, could new ones be put in place?
2. Look at getting out of onerous contracts which cannot be afforded. Check with lawyers if legally binding obligations have been formed or not. Consider the cost of terminating contracts which may be cheaper than continuing.
3. Do very thorough investigations into the credit worthiness of any one supplier or customer who is crucial to a business.
4. Ask for payment up front, in cash or by irrevocable Letter of Credit payable at sight and also director or parent company guarantees of obligations and ensure they are drawn up by lawyers so that they are legally binding.
5. Every seller ought to have written conditions of sale which reserve ownership of the goods (or intellectual property where copyright such as computer software or designs is being written for a customer) until full payment is made. Ensure the written terms apply and are compliant with case law on retention of title. Then if a customer goes bust you can walk into their premises and take your goods back. If you do not do this, ownership passes on delivery even though payment has not been made!
6. Consider mergers. Although the competition rules have not been set aside, it is likely that a more understanding attitude will be taken by competition regulators to mergers even between competitors. It seems like the Lloyds HBOS merger will be permitted to proceed despite breaking the usual rules but only because of Parliamentary approval. Now is a good time to pick up cheap assets at fire sale prices but always take legal advice.
7. Avoid the dodgy dealings some businesses engage in during a recession such as price fixing with competitors, rigging of bids and other illegal business practices. The Office of Fair Trading has just issued a statement of objections against some recruitment companies which may lead to fines of up to 10% of worldwide group turnover in due course and where there is dishonest horizontal price fixing and bid rigging individuals can be jailed for breach of the Enterprise Act 2002.
8. Assess if contracts can be transferred. Some suppliers have been assigning contracts to new subsidiaries with very poor credit records. Sometimes the contract prohibits assignment of even its benefit without consent, so do check the legal position before accepting contracts can be moved around a group of companies.
9. Recover debt. Often he who proceeds first recovers money. Consider issuing statutory demands, starting legal action and pursuing other parties for breach of contract. When money is tight, every penny counts.
10. Do not let large debts build up with customers who may not be able to pay. Take action. Require payment up front, security or even an equity stake in their business. Refuse to provide goods or services if no payment is forthcoming.
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New Health and Safety Offences Act
From January 2009, executives and managers are at risk of being sent to prison for two years for breach of health and safety legislation. The Health and Safety Offences Act 2008 increases the number of circumstances in which employees may be imprisoned for health and safety breaches.
David Boon a partner in Thomas Flavell & Sons says:-
"Employees could find themselves in prison under the new law if they fail to take reasonable care of the health and safety of others or even themselves. In addition, a director and senior manager can infringe the law where the problem was caused with their consent, connivance or neglect. The highest fine that can be imposed by the lower courts has risen from £5,000 to £20,000. Higher courts can impose unlimited fines.
Businesses can protect themselves by ensuring staff are well trained and that documentation and instructions are sent to staff so they are aware of their obligations and directors can, in some cases, protect themselves through taking out insurance policies.
If you need advice on health and safety compliance and the impact of the new law on you, please contact us for further information.
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Company Law Changes
New company law provisions came into force under the Companies Act 2008 on 1st October 2008.
Tom Flavell who heads the Firm’s Company/Commercial Department says:
The changes include:
• the general duties of directors in respect of conflicts of interest;
• the new procedure for private companies to make capital reductions supported by a solvency statement instead of by a court order;
• companies now have to have at least one natural person (not a company) as a director - a company cannot be a sole director of another company (some existing companies will have more time before the rules change);
• there is a new minimum age of 16 for directors;
• the restrictions under the Companies Act 1985 on financial assistance by private companies for the acquisition of their own shares have also now been repealed.
Many companies are also updating their Articles of Association to reflect changes in the Companies Act 2006 such as the removal of the requirement to have a company secretary and the abolition of the rule that companies must have an Annual General Meeting each year. Some directors are tempted to cut corners in recessionary times. However, directors' duties are now clearly set out in the Companies Act 2006 and compliance with the law is essential. Contact us if you want more information on how the new company law provisions affect your business.
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Partnership Changes
We welcome David Boon to the Partnership with effect from 1st September 2008. David has been with the Firm for a number of years and specialises in Employment Law and Litigation including Personal Injury cases.
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Client Monies - The Credit Crisis
Clients should be aware that whilst all their monies are placed by us into a designated Client Account with a bank or building society in accordance with the Solicitors Accounts Rules 1998, Thomas Flavell & Sons and its partners are not liable to repay money belonging to Clients lost through the failure of the bank or building society in which those monies are deposited.
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Keeping Afloat - The Credit Crisis
In the current economic climate, more Clients than ever are turning to us for legal advice on many important current issues.
Tom Flavell managing partner of Thomas Flavell & Sons says:-
"The takeover of HBOS by Lloyds and the nationalisation of Bradford and Bingley, as well as other well publicised institutions in financial difficulties, emphasise the importance of knowing your legal rights. It was only after publicity that some clients realised savings over £35,000 (now increased to £50,000) are not protected in banks. Joint account holders are each entitled to claim compensation. We are heavily involved in helping local businesses who are also suffering the fallout from the current financial crisis and would strongly urge people to take legal advice early. Often, bankruptcy or liquidation can be avoided if action is taken early enough.
In addition, it is a criminal offence, which can lead to jail sentences, if directors trade a company whilst it is insolvent. So it is often wise to take early action.
We can advise you if you are buying or selling a business, or assets of a business, and if you need legal expertise on issues such as assignment or transfers of business contracts. We also can advise you on how to check your contracts, rights and liabilities and also how to check up on your customers and suppliers and be cautious if they wish to move contracts into the names of other legal entities.
Call Tom Flavell or Jamie Connolly on 01455-610747 for further information.
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