Google has announced a significant reorganisation and the creation of a new holding company named Alphabet Inc. In this update, we consider the reasons why companies may choose to do this.

Google has announced a reorganisation of its group structure. Whilst Google will retain its core internet businesses (including Search, Maps and YouTube), its more diverse businesses (including drones and Google Glass) will be spun out into separate subsidiaries under the ownership of Alphabet Inc, its new holding company.

Reasons to reorganise

There are many reasons why a group may reorganise itself, but most tend to fall under one of the following categories:

• Tax: changes to a group structure may make it more tax efficient and secure tax advantages
• Pre-acquisition planning: when a group is planning to acquire a company or business division, a reorganisation may help to provide appropriate space for the target within the group structure
• Pre-disposal planning: when a group is planning to dispose of a subsidiary or business division, a reorganisation may help by addressing any separation or transitional issues required for the subsidiary's removal, or by incorporating the division into a stand-alone subsidiary it can provide certainty as to what the buyer will acquire
• Post-acquisition planning: following the acquisition of a company or business division, a reorganisation may facilitate the target's integration into the group structure. This may be by hiving down its assets into existing subsidiaries or transferring it to an intermediary holding company if the acquisition structure was not entirely to the group's liking
• Efficiency reasons: a reorganisation may be desirable for efficiency reasons, either to create business divisions within one subsidiary, to incorporate business divisions as stand-alone subsidiaries or to reduce the size and complexity of a group structure

Comment

In Google's case, it would appear that the reorganisation stems largely from efficiency reasons.

One of the historical criticisms made of Google is that it has become too diverse, with multiple business divisions that provide insufficient clarity to investors on its strategy and on spending for new products. This is a common issue for companies with multiple business divisions, as the fine detail of each division's performance can be hidden or blurred by the company's consolidated reporting.

Google's response, in the words of founder Larry Page, aims to make the group "cleaner and more accountable" and, in particular, spinning out its non-internet businesses into separate subsidiaries will achieve this by ring-fencing their performance and spending.

There would also appear to be a degree of pre-acquisition planning in Google's actions, as the new structure will allow provide them with the mechanism to add in standalone businesses and subsidiaries should they continue their run of acquisitions.

Regardless of the reason, thorough planning is paramount to any reorganisation and appropriate legal and tax advice should be taken on the specific circumstances that apply. Reorganisations will almost always involve the transfer of shares, businesses and assets between group companies and proper documentation should always be put in place to document these steps.

In line with its objective of maintaining and enhancing the UK's competitiveness as a centre for fund domicile, the government has set out proposed changes to UK partnership law.

Recognising that existing UK limited partnership law is not able to accommodate fully the needs of private equity and venture capital trusts, the government has issued a consultation on a proposed new private fund limited partnership vehicle.

The proposed amendments are designed to simplify the existing regime and remove some of the uncertainties that exist, whilst ensuring that 'the UK remains the market standard structure for European private equity and venture capital funds.'

New designation

The new vehicle would be designated as a private fund limited partnership (PFLP) and would be available to limited partnerships meeting the criteria at the point of registration, namely those constituted by written agreement, qualifying as a collective investment scheme (under the Financial Services and Markets Act 2000) and whose application for registration includes a certificate signed by a solicitor confirming that the partnership meets the criteria.

To reduce administrative burden and protect investors' privacy the registration process would also be simplified by removing the requirements to register the amount of capital, the general nature of the PFLP and the term of the PFLP.

It is also proposed that existing limited partnerships will be able to re-designate as PFLPs within one year of the introduction of the new legislation.

Capital contribution changes

Under current legislation, withdrawal of its capital contribution will result in a limited partner becoming liable for the debts and liabilities of the limited partnership up to the amount of the withdrawal. For this reason, contributions are often structured with only a minimal capital element, the majority being provided by way of loan.

The government recognises that this results in considerable complications and unnecessary confusion for those unfamiliar with UK partnership law. It therefore proposes removal of the requirement to make any capital contribution to the PFLP, alongside removal of liability for capital contributions that have been withdrawn.

'White list' activities

Currently, if a limited partner takes part in the management of the partnership business, it may lose its limited liability status and become liable for the partnership debts and obligations incurred while it does so. This principle will continue to apply to PFLPs but a 'white list' is proposed which will allow limited partners to undertake specified activities without being deemed to take part in the management of the business. These include:

• approving the partnership accounts
• acting as a director, member, officer or agent of, or shareholder in, a general partner or person appointed to manage or advise the partnership
• appointing or nominating a person to represent the limited partner on a committee
• enforcing rights under the partnership agreement
• taking part in decisions about types of investment, changes in the general nature of the partnership, acquisitions and disposals of partnership business, appointment of partners and dissolution or winding up of the partnership

Exemption from statutory duties

In the context of private fund investments, some of the statutory duties applying to partners generally are inconsistent with the position of a largely passive investor which often makes its investments in competing businesses.

For this reason, it is proposed that the duty to render accounts and information to other partners and the duty to account for profits made in competing businesses, shall not apply to limited partners in a PFLP.

Other changes

Other changes proposed in the consultation include:

• removal of the requirement to advertise in the Gazette if a general partner becomes a limited partner or if a limited partner assigns its interest to another person
• allowing the partners (and, where there is no general partner, just the limited partners) to agree among themselves who should wind up the partnership without having to obtain a court order
• granting the Registrar of Companies the power to remove inactive PFLPs from the register (currently there is no procedure for removing a limited partnership from the register, even if it has been dissolved)

The need for reform

If introduced, these reforms will align the UK with other jurisdictions which already have, or are introducing legislation which provides for, flexibility for private fund structures.

It is proposed that the changes will be effected through a legislative reform order - a statutory instrument used for removing or reducing legislative burden.

The consultation closes on 5 October 2015. Read it here.

National law firm Shoosmiths has advised private medical insurance broker Chase Templeton, on the strategic acquisition of Atlas Consulting Group Limited adding £13.8m of annual premium income (API) and representing the largest acquisition by the company.

This acquisition of Atlas Consulting Group brings to Chase Templeton a broader client base with many larger corporate clients and a dedicated specialist sales team.

Since securing investment from Palatine Private Equity in 2013 Chase Templeton has completed more than 40 acquisitions of other private medical insurance brokers and books of insurance business making it the biggest consolidator in its market and Shoosmiths has advised them all along the way.

In May, Shoosmiths advised Chase Templeton on the acquisitions of both Get Private and Medical Insurance Advisors, which together added £7.8m of additional API to the business, this has since been followed just last month with the acquisition of Best Go Private contributing another £3.1m of API.

The acquisitions have contributed to Chase Templeton's substantial growth in annual premium income, turnover and profitability and it has moved into new headquarters to accommodate a 50% increase in staffing levels. The combined business now has over £125m in Annual Premium Income, protects over 110,000 lives and employs nearly 100 staff who serve in excess of 35,000 corporate and individual clients.Shoosmiths corporate partner, Karen Procter - who has worked with Chase Templeton closely since 2012 - and associate Benjamin Dredge, advised on the acquisition of Atlas.

Warren Dickson, chief executive of Chase Templeton, said: 'This is a particularly significant deal, not just in terms of its size but its strategic importance as it will extend substantially our presence in the larger SME and corporate market.

'We're grateful to Shoosmiths for a highly professional and responsive service which enabled another smooth transaction, allowing us to focus greater executive energies on planning the integration of policyholders and former Atlas staff into our business.'

Shoosmiths' Karen Procter, who counts 16 years' experience of advising on corporate transactions, said: 'Chase Templeton is a fast-growing company with a great reputation for customer care. Shoosmiths and Chase Templeton have worked together on a large number of acquisitions, but this acquisition is particularly strategic and the largest undertaken. We look forward to continuing the relationship as Chase Templeton maintains its strategy for growth.'

Shoosmiths' corporate team advises public and private companies, management teams, investors and debt providers through the business life cycle. Shoosmiths work with businesses from start-up and first round finance through to mergers and acquisitions, MBO and MBI transactions, development funding and on exits, by way of sale, listing or private equity investment.

The national corporate team is ranked in second place by deal volume in Experian's UK Deal Review and Advisor League Table and has recently won Law Firm of the Year at the M&A Awards 2015.

National law firm Shoosmiths has advised Thorntons PLC (Thorntons) on the sale of the British Chocolatier to Italian confectioner Ferrero International S.A. (Ferrero), for £112m.

Ferholding, a British-based subsidiary of Ferrero, offered the high street retailer 145p per share, marking the first acquisition of a branded company for Ferrero who are the fourth-largest confectionery brand in the world. The combination of Ferrero and Thorntons brings together two complementary players in the confectionery industry - Thorntons as an established and historic brand in the UK and Ferrero as an admired and successful global confectionery player. The deal has now been approved by shareholders and competition regulators.

Shoosmiths corporate partners, Crispin Bridges Webb and Martin Letza led the deal with senior associate Kelly Prestidge and solicitor Marc Piano. All worked to a strict deadline and tight timescales to ensure Thorntons had all relevant legal advice and documentation to progress the deal.

Thorntons company secretary, Mark Henson, said: 'We have worked with Shoosmiths for some years and were confident the corporate team would support myself and the Board in meeting the challenges of achieving the very tight timescale of the recommended offer to shareholders.

'The knowledge and background Shoosmiths have of our business added value to the transactional work required and it was great to work with the Shoosmiths team on this important and exciting step in Thorntons' future.'

Shoosmiths corporate partner, Martin Letza, commented: 'This deal represents the largest the European confectionery market has seen for a long time and we wish Thorntons all the best in the next phase of their business.

'The very tight timescale made the transaction a real challenge for all parties. Everyone on both sides of the transaction worked extremely hard, and we are delighted to have achieved this excellent result for our client. We are lucky, at Shoosmiths, to have such a wide service offering so all aspects of a deal such as this can be covered within the team.'

Shoosmiths' corporate team has advised public and private companies, management teams, investors and debt providers through the business life cycle. Shoosmiths work with businesses from start-up and first round finance through to mergers and acquisitions, MBO and MBI transactions, development funding and on exits, by way of sale, listing or private equity investment.

The national corporate team has been placed second by deal volume in Experian's UK Deal Review and Advisor League Table and eighth by deal volume in Europe. The firm recently won Law Firm of the Year at the M&A Awards 2015.

Due diligence can be a daunting and burdensome process for a seller, particularly where tight timeframes are involved.

Here are our top tips for a seller responding to legal due diligence enquiries, to make the process as focused, cost-effective and efficient as possible. With foresight and preparation successful due diligence is certainly achievable.

Top Tips

. Understanding and scope: although rudimentary, it is essential that time is taken to ensure that the seller's internal team understand the process, purpose and scope of due diligence

. Choose the right team: choose who will form part of your wider due diligence team. A seller's lawyers and accountants will work closely with the seller's internal team to respond to enquiries and collate the supporting documents. The internal team should be large enough that it is properly resourced but not so large that it is difficult to manage. Have a clear reporting structure and appoint a project manager who will oversee the internal team and liaise with external parties

. Early preparation: invest the time to collate all of the business's key contracts. Check they are signed, in date, and contain all relevant appendices and attachments. Liaise with counterparties to obtain copies of any missing information. It is also important to flag any key issues with your advisers at this early stage

. Sensitive information: earmark documents that contain sensitive information and discuss this with your advisers. Personal details will usually need to be anonymised to comply with data protection laws and commercially sensitive information will also need to be managed carefully, particularly if there are third party confidentiality agreements

. Communicate: set out clear objectives and ensure everyone involved understands their specific role in the process. Maintain open lines of communication with your advisers and ask questions along the way. This will keep the momentum going, help avoid mistakes and ensure a smoother process

. Openness and accuracy: if there is any doubt about whether something should be disclosed, speak to your advisers. It is usually better to be open from the beginning rather than raising an issue at a later stage

. Using a data room: all documents can be stored in one location so that they are organised and easily accessible. It is important to give careful thought to access rights and permission levels to manage risk. The internal team are likely to upload documents to the data room directly. They should familiarise themselves with all of its features and adhere to a clear structure and numbering system according to the due diligence questionnaire

. Taking stock: once caught up in the whirlwind of due diligence, it is easy to lose sight of the objectives. To avoid this, take stock of the objectives and regain focus at regular intervals

As the #2 law firm by deal volume nationally in Experian's 2014 UK Deal Review and Advisor League Table, our corporate team are perfectly equipped to advise you on every element of your transaction.

Please contact the author for more information, or to discuss how we can assist you with your transaction.

National law firm Shoosmiths advised the sellers on the disposal of Global Group (UK) Ltd, a global healthcare business, to Impellam Group plc for an enterprise value of c.£37m.

Justyn Randall, previously the CEO of Global Group, remains in the business and will become responsible for leading the business in Australasia. Ronan Corrigan, another key member of the management team, will also remain in the business and will be responsible for leading the business in Ireland.

Established in 2002, Global Group is a worldwide strategic staffing partner to the public and private healthcare sectors providing a range of recruitment and agency management solutions, specialising in locum doctors, with operations in the UK, Ireland, Australia, New Zealand and Canada.

Shoosmiths corporate partner, Sanjeev Sharma, led the deal with support from senior associate Iain Butler, associate Claire Checketts, trainee solicitor Aleksandr Bosch and paralegal James Grinstead. The corporate team were assisted by employment senior associate Simon Fennell, tax associate Tom Rank and intellectual property solicitor, Jo Joyce.

Justyn Randall said: 'Shoosmiths were absolutely superb. Sanjeev and his team impressed us with their dedication and the extremely high level of service throughout the transaction. There were many shareholders and option holders to advise and the multi-jurisdictional element of the transaction required careful management.'

Sanjeev Sharma said: 'We have worked with Global Group for a number of years and it was a pleasure to guide the shareholders through the sale of their very successful business to Impellam.'

Shoosmiths' corporate team has advised public and private companies, management teams, investors and debt providers through the business life cycle. Shoosmiths work with businesses from start-up and first round finance through to mergers and acquisitions, MBO and MBI transactions, development funding and on exits, by way of sale, listing or private equity investment.

The national corporate team has been placed second by deal volume in Experian's UK Deal Review and Advisor League Table and have recently won Law Firm of the Year at the M&A Awards 2015.

Companies House has published a revised timetable for implementation of the company law provisions of the Small Business, Enterprise and Employment Act 2015.

A number of provisions expected in early 2016 have been pushed back by a few months. Notably, this includes the requirements for companies to keep a register of persons with significant control, which we summarised in a previous article.

The timetable for implementation now stands as follows:

The revised timetable provides only a small measure of extra time to prepare for the introduction of PSC registers. Given the significant work which some companies may face in obtaining the necessary information to enable compliance with the new regime, companies should continue to press ahead with their preparations. Our specialist team can help with all aspects of these company law changes. For more information, please get in touch with Sian Sadler or Marc Piano.

National law firm Shoosmiths has advised long-standing client, Octopus Investments ('Octopus'), on their investment in Healthcare and Services Technology Group ('HST').

HST are the owners of Care Monitoring 2000 ('CM2000') and Ezitracker - the UK market leaders in the provision of remote workforce management software solutions.

Octopus is a fast-growing UK fund management company with leading positions in several specialist sectors including smaller company investing. It currently manages £5 billion of funds on behalf of retail and institutional clients.

Founded in 1999, CM2000 has become a global supplier of patented, telephony based monitoring, scheduling and management information services to the health and social care sectors. The company's services are used extensively by homecare providers throughout the UK and in the United States, helping them to save money, improve quality of service and win new business. CM2000 is based in Sutton Coldfield and has offices in Glasgow and Clearwater, Florida.

The Group acquired Ezitracker in 2013. Ezitracker provides remote workforce management services to homecare providers, facilities management companies and other organisations that employ large numbers of field-based staff. Ezitracker has offices in Cwmbran in Wales, Australia and New Zealand.

The investment from Octopus will enable HST to deliver sustained investment in new technologies across both businesses and to develop its markets both at home and overseas.
Shoosmiths partner Alastair Peet led the deal with support from senior associate Sarah Thawley and solicitor Rachel Seaton. VCT tax structuring advice was provided by partner Tom Wilde, and banking advice was provided by partner Rebecca Mauleverer and associate Suzanne Love.

Grant Paul-Florence, head of the Intermediate Capital team at Octopus, said: 'Once again, Alastair and the team at Shoosmiths have provided us with exemplary advice on this transaction.
'The management team at HST has built world class businesses which have the potential for significant growth not only in the UK but across a number of other markets, including the U.S.A growing ageing population and the need for better cost efficiencies across the care sector mean that the market opportunity is very exciting. Through this investment we are backing a business that has the opportunity, technologies, ambition and management team to become the global leader in its field.'

Shoosmiths partner Alastair Peet, said: 'We were very pleased to be working with the Octopus team again, to instruct them on this important investment. Our long-standing relationship means we can draw upon our extensive knowledge and experience with the business to deliver a great outcome and we wish Octopus all the best with this new venture.'

Joe Hartman led the deal for Octopus with support from Clara Hansen and both will join the Board.

Shoosmiths' corporate team has advised public and private companies, management teams, investors and debt providers through the business life cycle. Shoosmiths work with businesses from start up and first round finance through to mergers and acquisitions, MBO and MBI transactions, development funding and on exits, by way of sale, listing or private equity investment.

The national corporate team has recently been placed second by deal volume in Experian's UK Deal Review and Advisor League Table.

National law firm Shoosmiths has been shortlisted in the 'Legal Advisor of the Year' category in the Laing Buisson Awards.

The annual awards are hosted by Laing Buisson, a highly regarded provider of market intelligence on the independent health, community care and childcare sectors. The 2015 awards ceremony will mark a decade of celebrating the achievements of independent healthcare providers and the businesses that support them.

Shoosmiths' healthcare team has been shortlisted for the award in recognition of their experience of advising investors and businesses in the healthcare sector, including acquisitions, buyouts, buy and build programmes and disposals.

The healthcare law team is a cross-practice group operating nationally in the UK, led by corporate partner Emma Gibson. The team boast a cross-discipline capability involving corporate, real estate, regulatory, employment and commercial law teams based in key locations across the whole of the UK. Their clients include care homes and domiciliary care providers, specialist care providers, hospital providers, NHS Trusts, major international healthcare companies, university spin-out companies, suppliers and investors in the market.

Commenting on the shortlisting, corporate partner, Emma Gibson, said: 'We are honoured to be shortlisted for a Laing Buisson Award. Our healthcare team is dedicated to providing an exceptional client experience and innovative solutions to challenges in the healthcare market. This shortlisting is a reflection on the team's hard work, experience and expertise.'

The winners of the Laing Buisson Awards will be revealed at this year's ceremony, which will take place on 11 November 2015 at the Lancaster Hotel in London.

The Manchester office of national law firm Shoosmiths has advised NVM Private Equity (NVM) on their £4.5m investment of development capital into Love Energy Savings (LES), a Bolton-based comparison and procurement service.

LES helps small and medium-sized enterprises (SMEs) identify the optimal gas and electricity supplier and tariff to suit their needs and manages any switch of energy supplier on behalf of the SME. Established in 2007 to target the non-domestic energy user market, LES now has a portfolio of almost 16,000 live client contracts.

NVM's investment in LES has been made to support the company to achieve its growth plans. LES' management team is planning to grow the business organically over the next five years. It is anticipated that many more SME's will look to switch their gas and energy providers in the coming years and there are clear signs that SMEs are increasingly using the services offered by intermediaries such as LES.

Manchester-based Shoosmiths corporate partner, Kieran Toal, led the deal with support from senior associate Damien Brown.

Andy Leach, the lead investment partner at NVM on the transaction, said: "Shoosmiths were instrumental in ensuring that our investment progressed smoothly to completion. The deal team's refreshingly commercial and solution-oriented approach has won them many friends amongst the parties to this transaction".

"We are delighted that this advice has enabled us to support a young and vibrant business such as LES in the achievement of their ambitious growth plans. Phil and his team have built a great business in a relatively short period based on a market leading IT platform, where the culture of customer service and transparency is at the heart of the way they operate.

"The business energy market is too complex for most small businesses to properly understand and LES, with access to a wide range of tariffs and an intimate understanding of the market combined with an ability to take away the administrative burden that can go with switching, is perfectly placed to improve the ability of SMEs to buy energy better."

Kieran Toal said: "LES is clearly going from strength to strength and with a growing portfolio of SME customers and strong customer service ethos, as a trusted partner of SMEs, LES is well placed to benefit from the shift by SMEs towards switching their gas and electricity providers.

"We are delighted to have acted for NVM on this transaction and again demonstrates the progress Shoosmiths is making in the Manchester and wider north-west market for acting on private equity transactions and specifically acting for private equity funders. We wish NVM and LES all the best in their partnership."

Shoosmiths' corporate team advises public and private companies, management teams, investors and debt providers through the business life cycle. Shoosmiths work with businesses from start-up and first round finance through to mergers and acquisitions, MBO and MBI transactions, development funding and on exits, by way of sale, listing or private equity investment.

The national corporate team is ranked in second place by deal volume in Experian's UK Deal Review and Advisor League Table and has recently won Law Firm of the Year at the M&A Awards 2015.

A new £1.5 million fund to help local people take control of pubs at risk of closure was launched on the 11th September 2015 by Community Pubs Minister, Marcus Jones.

The new 'Pub Loan Fund' will help community groups take over the running of their much-loved local, by providing small loans to start feasibility work, pay for lawyers' fees or get materials for refurbishment.

We have all heard the tales of people crowd funding a takeover of the local pub, but previously the onus has been on the groups of enthusiastic pub lovers to get on and do this themselves. The Localism Act 2011 allowed the listing of pubs as Assets of Community Value. This meant that people wanting to build a proposal had six months to do so. Extra protection to save pubs at risk of redevelopment can come in the shape of an Article 4 direction by the Local Council to prevent the change of use to a supermarket for example.

The new fund should give local entrepreneurs the ability to apply for financial assistance to run their local.

Once you have got your group together who are committed to taking control of your pub this will be just the start. Before planning which craft ales you will sell, quiz nights and darts teams you will have to consider some of the less exciting, but all important, legal elements.

How will you set up your business?

Corporate advice on how best to structure your group of individuals or businesses will be needed. Our corporate team can help with advising on the acquisition of your local pub and provide step-by-step guidance on what you are acquiring as part of your new venture.

In addition, once you have purchased your local pub, Shoosmiths' corporate team can provide further assistance from how to structure your corporate ownership by drafting shareholders' agreements which govern such matters as how to distribute profits between the shareholders. To helping you with your statutory filing requirements at Companies House.

How will you fund your business?

Our Banking team can advise on the terms of the pub loan and if you need extra bank funding on top, they will give advice on the facility and loan documents.

How will you hold the asset itself?

Our Real Estate team can review the title to the property and advise on any issues preventing ongoing use and operation down to the purchase or leasing of the asset itself. We also advise on the agreements Licensees have with breweries (known as 'beer ties').

Licensing

Your pub will need a valid premises licence to sell alcohol and provide regulated entertainment.Your Premises Licence will be crucial to the success of your pub. You need this to sell alcohol, have live musicians perform or play recorded music and is granted by the local authority where the pub is situated. The premises licence contains the hours which the pub can operate, it contains the restrictions by way of conditions that need to be adhered to and also a plan of the premises.

We can help you from start to finish - we can check that the premises has a valid premises licence. If it doesn't, we can assist you in applying for one.

If it does have one, we can assist you to transfer the premises licence. We can vary the Designated Premises Supervisor (DPS), this is the person who is responsible for the day to day running of the pub. The DPS must be a personal licence holder, which we can assist you in applying for also. You may wish to vary the pub layout, or vary some of the current conditions on the premises licence, all of which may need the input of a lawyer to get the application right and granted within your timescales.

If the new 'Pub Loan Fund' has inspired you to start running your own pub, and put your name above the door, give the Shoosmiths Licensing team a call to discuss your needs.

National law firm Shoosmiths acted for the management team of Milton Keynes based business Compello Holdings Limited ('Compello') in the £113m sale to Hoist Finance (UK) Limited in July 2015.

Compello, which has been providing collection services since 2003, and became a debt purchaser in 2010, held a portfolio of more than one million agreements at the time of acquisition.

Hoist Finance is a leading debt restructuring partner to international banks and financial institutions, offering a broad spectrum of advanced solutions for acquisition and management of non-performing unsecured consumer loans. The total carrying value of Hoist Finance's acquired loans was approximately SEK 8.9 billion as at 31 December 2014.

CEO of Compello, Sarah Lambert, remains in place following the acquisition by Hoist Finance.

Shoosmiths' corporate partner Sanjeev Sharma led the deal with assistance from associate Claire Checketts, trainee solicitor Aleksandr Bosch and paralegal James Grinstead. Partner Gwynneth Tan and senior associate Simon Fennell advised on employment matters, with associate Tom Rank advising on tax matters.

Sarah Lambert said: 'We were delighted with the level of service from the Shoosmiths team. They were always available and highly responsive. At all times, we had every confidence in their team. The breadth of knowledge, and support across the teams was excellent. We enjoyed working with them throughout the transaction process.'

Shoosmiths' corporate team has a strong track record of advising public and private companies, management teams, investors and debt providers through the business life cycle. Shoosmiths work with businesses from start-up and first round finance through to mergers and acquisitions, MBO and MBI transactions, development funding and on exits, by way of sale, listing or private equity investment.

The national corporate team has been placed second by deal volume in Experian's UK Deal Review and Advisor League Table and have recently won Law Firm of the Year at the M&A Awards 2015.

More AIM companies are set to become subject to the provisions of the UK Takeover Code at the end of September 2013 as a result of changes published earlier this year.

Companies registered in the UK, Channel Islands or Isle of Man whose shares are admitted to trading on a UK-based multilateral trading facility such as AIM or ISDX's Growth Market (formerly PLUS Markets), will fall within the scope of the UK Code on Takeovers and Mergers, even if their place of central management and control is overseas, with effect from 30 September 2013.

The change involves the removal of the so called "residency test" which has meant that AIM companies whose management was based outside the UK (even if they had a registered office in the UK, Chanel Islands or Isle of Man) fell outside the jurisdiction of the Takeover Panel until now.

It also addresses the uncertainty felt by many holders of shares in AIM companies who automatically expected to benefit from the protections offered by the Code, and brings the Panel's approach to AIM companies in line with companies whose shares are listed on the Main Market of the London Stock Exchange.

What this means .

For shareholders

The Takeover Panel, through the UK Code on Takeovers and Mergers, regulates the takeovers of companies subject to its jurisdiction. The Code is based upon six general principles which govern the behaviour of companies involved in takeovers. These include the avoidance of the creation of a false market, the provision of sufficient information and equality of treatment of shareholders. Holders of shares in an AIM company that previously fell outside of the Panel's jurisdiction will now benefit from these principles and the rules set out in the Code that derive from them in the event of a takeover even if the company's directors and place of central management are located outside the UK.

For overseas based AIM companies

Overseas based AIM companies that have their registered office in a UK territory who will fall within the jurisdiction of the Code should:

• Familiarise themselves with the provisions of the Code, particularly the obligation under Rule 9 which requires any person (or persons "acting in concert" with that person) who acquires 30% or more of the voting rights of a target company (including by a series of transactions) to make a mandatory offer to acquire the remaining shares which it does not hold. 
• Review their Articles of Association to identify any provisions that currently replicate or overlap with the Code so that shareholder approval to remove these provisions can be obtained at the company's next AGM.

The next phase in the implementation of a number of company law provisions of the Small Business Enterprise and Employment Act 2015 will include changes affecting the procedure for appointing directors and disclosing directors' personal information.

Changes in appointment procedure

From 10 October 2015, the procedure for appointing company officers, both on and following incorporation, will change.

Newly appointed directors and secretaries will no longer be required to show their 'consent to act' on relevant Companies House forms. Instead, the company will be required to confirm that the appointee has consented to act.

In the case of director appointments, Companies House will then notify the director of the appointment and provide information about the role and duties of a director.

Under future proposals, expected to be implemented in December 2015, the procedure for resolving disputes over director appointments will be simplified. Wrongly appointed directors will be able to apply for removal of their details from the register. The Registrar of Companies will be obliged to remove them if the company cannot provide sufficient evidence that the director consented to act.

Partial omission of directors' dates of birth

The day element of directors' dates of birth will, from 10 October, be left off the public register.

Directors appointed after that date will continue to be required to provide full date of birth details to Companies House, but only the month and year will be shown on the public register.

This change will go some way to protecting directors against identity theft. However, full date of birth information will remain on the public register where it is contained in filings made before 10 October.

Companies will still be required to hold full date of birth information on their own statutory registers, which must be available for public inspection. If, under future proposals, a company elects to keep its statutory registers centrally at Companies House, the full date of birth details will be available to search free of charge.

Companies House will still be permitted to disclose full date of birth information to certain public authorities and to credit reference agencies.

Companies House forms

These changes will mean updated Companies House forms, including:

• Director / secretary appointment forms: AP01, AP02, AP03, AP04
• Annual return form: AR01
• Director details change form: CH01
• Re-registration form: RR01
• Incorporation form: IN01
• Director termination of appointment form: TM01

The date of birth changes are also being replicated for limited liability partnerships. New forms will therefore include:

• Member appointment form: LLAP01
• Annual return form: LLAR01
• Member details change form: LLCH01
• LLP incorporation form: LLIN01
• Member termination of appointment form: LLTM01

There will be no transitional arrangements for use of the new forms. All forms received by Companies House from 10 October must be in the new format; any old-style forms received from that date will be rejected. The new forms have not yet been released by Companies House.

National law firm Shoosmiths has advised Murray Hennessy on his appointment as non-executive chairman of TGI Fridays UK and his investment in the group.

Mr Hennessy brings to the TGI Fridays Group a wealth of Board-level experience and an impressive track record of delivering growth in consumer-facing industries. He was Chief Executive of Trainline.com, the UK's leading online train ticket retailer, from 2008 to 2014.

Prior to this he was the CEO of Avis Europe plc from 2004 to 2008 and CEO of Buy.com UK, an online retailer of technology products, from 2000 to 2001. Buy.com was acquired by the John Lewis Partnership in 2001 and Mr Hennessy became head of the newly created John Lewis Direct. At John Lewis Direct, Mr Hennessy launched and grew Johnlewis.com into one of the UK's leading online retailers winning numerous website awards in the process. He later became Commercial Director for John Lewis Department Stores.

TGI Fridays UK is an authentic American casual restaurant chain with 67 UK restaurants in a range of locations, including city centres, shopping centres and leisure parks.
Hennessy's appointment supports the company's ambitious growth plans and strategy to take advantage of new technologies and increase their digital engagement with customers.

Corporate partner Alison Gilson and solicitor Jen Paton advised Mr Hennessy on his appointment and his investment in the group.

Murray Hennessy, Non-Executive Chairman of TGI Fridays UK, said:

'Shoosmiths provided thorough, clear advice throughout and I thank them for their hard work and responsiveness. TGI Fridays is a highly recognised and respected brand offering a unique restaurant experience and this is an exciting time to join the group as they look to expand their infrastructure model and drive forward growth in the UK.'

Shoosmiths' Alison Gilson, commented: 'We were very pleased to be able to advise Murray on his appointment and investment in the TGI Fridays group. It was great to work on this important and exciting step in the future of such a popular and fast growing restaurant chain.'

Shoosmiths' corporate team has a strong track record of advising public and private companies, management teams, investors and debt providers through the business life cycle. Shoosmiths work with businesses from start-up and first round finance through to mergers and acquisitions, MBO and MBI transactions, development funding and on exits, by way of sale, listing or private equity investment.

The national corporate team has been placed second by deal volume in Experian's UK Deal Review and Advisor League Table and have recently won Law Firm of the Year at the M&A Awards 2015.

National law firm Shoosmiths acted for the management team of Coryton Advanced Fuels Limited, the market-leading fuel blending and consultancy services business, on a significant investment from Lyceum Capital to accelerate its international expansion.

The investment will enable the company to grow its range of added-value services and production capacity in the UK, develop existing export markets in Germany and expand into new markets in the US and Asia.

Based on the Thames estuary in Essex, Coryton develops high performance fuels for the aviation and motorsport industries, as well as bespoke and standardised fuels for the automotive sector, where its products are used to support research and development activities and the testing and certification of engines, lubricants and fuel additives. The facility is one of the most advanced of its kind globally.

Shoosmiths advised existing founder managers, Craig Goodfellow and Diane Lance, and the incoming CEO Nick Pye, on the investment, enabling an exit for Oakfield Capital who originally invested in 2010. Corporate partners Emma Gibson and Alastair Peet led the deal with support from senior associate Nina Smith. Employment partner Charles Rae also provided expert legal advice on the new service agreements for the management team.

Craig Goodfellow, co-founder of Coryton, said: 'We would like to thank the Shoosmiths team for the first class service they provided in relation to this investment. Their expert advice and understanding of the market gave us a great deal of confidence in their ability to seamlessly complete the deal - and we were proved right in our choice of legal advisor.'

Corporate Partner, Emma Gibson, said: 'We are pleased to have acted for the management team on this investment which will support their drive for growth in export markets around the world. This is an exciting time for the business and we wish Coryon and Lyceum all the best in their partnership.'

Shoosmiths' corporate team has a strong track record of advising public and private companies, management teams, investors and debt providers through the business life cycle. Shoosmiths work with businesses from start-up and first round finance through to mergers and acquisitions, MBO and MBI transactions, development funding and on exits, by way of sale, listing or private equity investment.

The national corporate team has been placed second by deal volume in Experian's UK Deal Review and Advisor League Table and have recently won Law Firm of the Year at the M&A Awards 2015.

National law firm Shoosmiths has advised private equity firm Oakfield Capital Partners (Oakfield) on an investment in to The Gainsborough Silk Weaving Co Ltd (Gainsborough) - a leading industrial-sized weavers in England which holds the Royal Warrant.

The new investment will allow the company to capitalise on its rich heritage of fabric designs and boost its sales and marketing efforts around the world.

Shoosmiths' partner Alastair Peet and associate Gareth Cook advised Oakfield on all corporate aspects while Tax partner Tom Wilde provided specialist EIS tax advice.

Michael Patton of Oakfield, who has joined the board of the Gainsborough, said: 'We believe that this unique, British business has the potential to sell its product globally. By leveraging its heritage product and manufacturing facility with financial resource and great people, we are confident that Gainsborough will grow quickly. Shoosmiths provided seamless advice to us on all corporate and tax matters for this important transaction.'

David Sentance has been appointed as Managing Director of Gainsborough and will lead the company's UK consolidation and expansion into the USA and Middle Eastern markets. David has spent more than 25 years in the fabrics industry building up companies supplying the furnishing industry on an international basis.

He said: 'I am very excited to be joining Gainsborough. The combination of our highly capable workforce, the expansive archive of designs compiled over the last century, and our new investment from Oakfield will give us the opportunity to bring new collections to the market, provide excellent service to our customers, and to grow our business significantly.'

Shoosmiths' corporate team advises public and private companies, management teams, investors and debt providers through the business life cycle. Shoosmiths work with businesses from start-up and first round finance through to mergers and acquisitions, MBO and MBI transactions, development funding and on exits, by way of sale, listing or private equity investment.

The national corporate team is ranked in second place by deal volume in Experian's UK Deal Review and Advisor League Table and has recently won Law Firm of the Year at the M&A Awards 2015.

The transparency in supply chains provisions came into force on 29 October 2015. The long awaited statutory guidance has been published. This briefing sets out the key points for business.

Introduction

The objective of the Modern Slavery Act 2015 is to prevent modern slavery entering the supply chain and organisations as well as preventing more people becoming victims. The stated aim of the government is to 'require businesses to be transparent about what they are doing and... increase competition to drive up standards'.

The statutory guidance provides information and case studies about how organisations can comply with the transparency in supply chain provisions ('the provisions'). Supply chain has its 'every day' meaning but an annex to the guidance refers to all supply chains and contractual relationships.

The provisions are designed to increase transparency by requiring organisations to set out the steps they are taking to tackle modern slavery. We have previously reported on the key legal obligations set out in the provisions.

It is anticipated that the first statements could show what businesses are doing to begin to act on the issue of modern slavery in their supply chain as well as identifying what investigation or collaboration needs to happen with others to cause change.

The Modern Slavery Act 2015

The provisions seek to create a 'level playing field' between those who are caught by the requirements who already act responsibly and those who need to change policies to ensure they do so. The hope is that businesses will go beyond their legal duty and do more to tackle modern slavery in their supply chains because it is 'the right thing to do'. The underlying message is that businesses who fail to comply with the provisions risk damage to their reputation and their brand and suggest that consumers, investors and NGOs apply pressure where they perceive that organisations haven't done enough to comply.

Who is required to comply?

A commercial organisation with a turnover of £36m or more which carries on business (or part of a business) in the UK and supplies goods or services is required to produce a slavery and human trafficking statement for each financial year of the organisation. A common sense approach is to be adopted. Even if the organisation carries out charitable, public functions or educational aims, the organisation will be required to comply with the provisions if it carries out commercial activities and meets the turnover threshold. This means that certain public sector organisations will be caught if they carry out commercial activities.

Franchises

Franchisers are required to make a statement if the turnover of the franchiser meets the £36m threshold. When making the statement, the franchiser may choose to include activities of franchisees in order to protect the franchiser's brand. Such an approach will show the franchiser takes the issue of modern slavery seriously.

If the franchisee meets the turnover threshold in its own right, the franchisee is required to make its own statement.

Parents and subsidiaries

If a parent or a subsidiary (irrespective of location) meets the requirements of the provisions, they are required to make a statement in their own right even if another company in the group does so. The definition of a subsidiary has the meaning given by section 1162 of the Companies Act 2006

The guidance states that it is for individual parent organisations to determine whether or not a subsidiary forms part of its supply chain. The provisions are referred to in the guidance as 'tests in the Act'. When considering whether or not the provisions apply to parents or subsidiaries, organisations should use the provisions as tests. If all the stages of the test apply, the organisation (or part thereof) will be caught and required to comply.

It is highly recommended for parent companies to consider including the activities of foreign subsidiaries in their statement especially where that foreign subsidiary is based in high risk location or sector.

Penalties

The civil penalties of an injunction or order for specific performance of a statutory duty remain but given the propensity for naming and shaming (most recently reported in the press regarding the non-payment of the national minimum wage) it is likely that organisations can expect the Anti-Slavery Commissioner to follow suit.

The provisions are designed to create a 'race to the top' through competition to 'drive up standards'. Transitional provisions are in place giving time for organisations to formulate and implement strategies rather than adopting a hasty approach. We are already seeing large clients experiencing pressure from those they supply to give assurances or point to a statement. In practical terms this means that those who comply sooner rather than later are in a better place when winning contracts. It is likely that tender documentation will include more questions around this topic.

Writing a slavery and human trafficking statement ('the statement')

The government has not prescribed the length of or content to be included within the statement. What is required is to set out in the statement the steps that have been taken during the financial year to ensure slavery and human trafficking is not taking place in any part of its own business or in any of its supply chains capturing all the actions it has taken. However, an organisation can choose to make a statement to say that no such steps have been taken.

The guidance includes top tips for writing a statement including keeping the statement succinct but cover all the relevant points, if an organisation can provide appropriate links to relevant publications, documents or policies, do so and specifying actions by specific country will help readers to understand the context of any actions or steps taken to minimise risk.

If an organisation has policies that are publically available and published on their website, rather than starting from scratch, the organisation may link to those policies in the statement. It is important to remember that the requirement to make a statement remains irrespective of the existence of those policies.

Information which an organisation could choose to include is set out in the guidance.

When writing a statement, there is a balance to be struck between providing sufficient detail to enable an understanding of the efforts made by the organisation and the technical or legal detail which might make the statement inaccessible.

The government expects the statement to evolve with the first statements providing details of what organisations are doing to act on the issue of modern slavery as well as their plans for the future (both in terms of due diligence and collaboration with others).

Policies

Although there is no prescriptive approach to drafting a policy, the guidance contains useful questions to consider when drawing up a policy supporting the statement.

One of the areas in which the government is keen to see improvement is in the plight of temporary workers with whom the organisation will not have a direct contractual relationship. It is recommended in the guidance that organisations should have specific policies in place to ensure that the potential risk of modern slavery is mitigated.

The guidance sets out good practice on what organisations should consider when putting policies together.

Those who have attended our seminars and receive updates on modern slavery will have heard our experts advocating ideas identified in the guidance regarding best practice for risk assessment prior to policy drafting.

Approving a statement

The statement must be approved at the highest level of the organisation (i.e. by a director or a partner as appropriate).

Senior level engagement is required. It is the responsibility of those in senior management to ensure there is a culture shift in the organisation to be aware of the risks of modern slavery. Policies must be implemented and procedures put in place to ensure those policies are followed. Organisations should ensure there is appropriate training in place for employees at all levels. It should be targeted to ensure the training has the most effect.

Publishing a statement

A link to the statement must be published in a prominent place on the home page of the organisation. The guidance recommends the link is clearly marked so it is apparent what it links to e.g. 'Modern Slavery Act Transparency Statement'. Where it forms part of a drop down menu, it should form an obvious part of that menu.

Due Diligence

The guidance recommends that due diligence procedures should be based on:

• proportionality of the risk itself
• the severity of the risk
• the influence the organisation has
• an informed risk assessment which has taken place

Examples of information which could be considered as part of due diligence is contained in the guidance.

In order to ensure the effectiveness of policies and action against perpetrators, due diligence should be conducted on an ongoing basis. Although the greatest level of engagement should be will 'first tier' suppliers, where possible, organisations should engage with 'second tier' suppliers. Integrity of investigations is key.

Assessing and managing risk

Organisations should consider the following areas when conducting risk assessments:

• business partnership risk
• country risk
• sector risk
• transaction risk

The guidance emphasises that continuous assessment and risk review is essential. The government believes collaboration between those in particular sectors will help prevent modern slavery. By way of example, the guidance cites a Seafood Ethics Common Language Group to tackle problems identified in the Thai fishing industry.

Human Rights

The guidance refers to the UN Guiding Principles (UNGPs) which are based on three pillars of human rights. They are a useful reference point for organisations which choose to implement a human rights policy.

Companies who are required to report under the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 who must also make a statement under the Modern Slavery Act should ensure requirements of both pieces of legislation are complied with. It is anticipated that organisations will make two separate statements rather than a single statement covering all requirements.

What to do if you spot the signs of modern slavery

If an instance of modern slavery is identified, organisations should always consider what approach will result in the safest outcome for the victim(s) whilst remembering the commercial clout the organisation holds over the perpetrator. The guidance suggests that termination of supplier relationships should be a last resort which should only be considered after all efforts to work collaboratively to remedy the situation have been exhausted.

If you are in any doubt about how the provisions apply to your business or supply chain, please contact Ron Reid on 03700 86 8471 or Jos Kirkwood on 03700 86 8347.

The introduction of a National Living Wage and its implications on the National Minimum Wage has been one of the biggest headlines of the Summer Budget 2015 - and one that is causing tremors throughout the healthcare sector.

The announcement that the minimum wage for workers over 25 will rise to £7.20 from April 2016 is likely to hit domiciliary and residential care providers hard, at a time when funding for care is already of serious concern in the healthcare sector. According to the charity Age UK, government spending on elderly care homes was cut by nearly a fifth between 2010 and 2014. These cuts and the pressure on care funding have already had implications for the sector. Wage costs are typically the biggest cost to care home operators and so, unless the fees paid by local authorities for state-funded residents increases comparatively, it will be the care providers that are squeezed.

Commentators suggest that the results of the change to the minimum wage may result in consolidation, business failures and service withdrawal in certain areas. However, it may also result in greater employee retention and consistency across the sector.

Concern regarding the proposed changes to the minimum wage has been further compounded by the recent case law decision in Tyco, which held that time spent by workers who have no fixed place of work travelling from their home to clients' premises counts as 'working time' - in other words, arguably all time travelling to clients should be included as "working time" when auditing compliance with minimum wage regulations.

Unfortunately, these proposed changes are also coming at a time when employers' mandatory contributions toward pension auto-enrolment schemes will be increasing, rising to 2% during the 'second transitional period' from 1 October 2017 to 30 September 2018, and then up to 3% during the 'steady state period' from 1 October 2018 onwards.

Unless (or until) the financing of social care funding is addressed, many providers are going to struggle to meet these increased costs.

The government has confirmed that it will consider social care funding in the next spending review in November, and until such time, it is difficult to assess the full impact these measures could have on the industry.

In the meantime however, it is crucial that providers use the coming weeks and months to consider strategy, update business plans and work with funders and advisors accordingly to ensure they comply with and are able to deal with these changes.

The changes to the National Living Wage will have implications for healthcare businesses across the UK. The main concerns are:

• Employment tribunal claims, which can be expensive and extremely disruptive, especially in the event of class actions and union involvement.
• Fines and penalties from HM Revenue & Customs, who are cracking down on care providers large and small for minimum wage non-compliance.
• Regulatory compliance failures; providers must ensure strict quality standards are met otherwise they risk fines, investigations or even suspension.

Healthcare businesses should take action now to avoid being hit by fines and penalties for non-compliance.

Our recommendation is to:

• Carry out an internal audit of employment contracts and business process, reviewing and updating where necessary.
• Check compliance with minimum wage laws (which can be complex to assess) and rectify if needed.
• Seek advice on regulatory compliance matters and how to deal with any issues that arise
• This will be particularly important for multi-site and/or franchise-based care providers. Carry out a risk assessment and work with your advisors to protect your position.

In order to remain compliant healthcare businesses will need to create a business strategy that will consider cost saving measures, disposals, market opportunities, cost sharing with other providers and fee negotiation.

Shoosmiths has an excellent understanding of the healthcare sector's challenges and opportunities, which enables our healthcare clients to access not only legal advice in many areas of law, but also business and strategic insights based on our market knowledge and experience. For more information on how we can help you, please contact our healthcare team.

The absence of non-compete provisions when purchasing a business should cause alarm bells to ring.

In the recent case of Luffeorm Limited v Kitsons LLP [2015] EWHC B10 (QB), the High Court was willing to hold a firm of solicitors liable in negligence and in breach of contract for failing to advise on the absence of non-compete provisions in the contract of sale.

The case

In April 2011, the claimants purchased the lease of a public house, the Highwayman's Haunt ('pub'), from the sellers. The sale included the purchase of the business of the pub as a going concern and the largest part of the consideration was for goodwill. Just three months from completion, one of the sellers took over another public house within a three mile radius of the pub. The claimants believed that the pub's customers had decided to follow the sellers and that this had led to a severe decline in the profits of their business. In July 2012, the claimants sold the lease of the pub for considerably less than they paid for it.

The claimants argued that the downturn in their business (and therefore their loss) would not have been suffered if the contract with the sellers had contained a covenant restraining the sellers from operating a competing public house within a five mile radius for a period of two years and if their solicitor had advised them of the risk that trade might be diverted if there was no such covenant.

What was the solicitor expected to do?

The court considered a number of cases concerning the extent of a solicitor's retainer. It accepted that the solicitor had no duty to advise the claimants on the commercial risks inherent in the transaction. The solicitor was retained to act on behalf of the claimants with their purchase of the 'leasehold business'. This was deemed to go beyond mere conveyancing in respect of the lease. However the solicitor should have noticed, and drawn to the claimants' attention, the absence of a restraint of trade covenant. His failure to do so meant that he was negligent and in breach of contract.

Ultimately, the claim failed on the causation ground. The court found that even had the claimants been advised of the absence of a restraint of competition covenant they would not have withdrawn from the transaction; the facts showed that they were determined to proceed with the transaction as quickly as possible.

Conclusion

• when paying valuable consideration for a business or the goodwill of a business, a prudent buyer should always ensure that restrictive covenants are negotiated prior to completion. This will offer much needed protection to the buyer who will want to preserve the future value of the business
• it is essential to ensure that clients and advisers are clear on the scope of work at the outset of a matter
• it's easy to fail to properly consider risks or adequately guard against them if you are pushing a deal through to completion. Where possible, manage the process within an appropriate timescale