The finances of a business can make or break a company, so seeking professional advice to ensure you’re on track is a great way to share the responsibility with the experts.
Our team has extensive experience in a number of areas of company finance, including reorganisations, shareholder agreements and dividends - and we're here to help you make sense of the complex world of company law and compliance.
A shareholder agreement can protect the future of your business and your investments in it. We can help you form an agreement that will protect your business should there be any disputes as the business - and your working relationships - evolve.
A shareholder agreement isn’t a legal requirement, however, it’s an essential way to help clarify how your business should be governed and protect each shareholder’s investment.
Articles of association are a useful document for businesses, and our experts can help you establish what needs to be included in yours. This can include regulations for specific company operations and how tasks should be performed, such as appointing directors.
Articles of association will also define the types of stocks a business has. This can be a useful and necessary way to establish the voting rights and access to dividends that each type of stock affords. Many companies have one type of share, ordinary shares, which may also be outlined in a shareholders agreement.
Share schemes, particularly Enterprise Management Incentives (EMI), are popular for businesses in the UK and offer generous tax savings and enable employees to profit.
EMI can be offered by companies that have assets of £30 million or less, and might offer employees shares worth up to £250,000 over three years.
There are a number of tax implications depending on how the shares are given. Shares distributed at a discount on market value will incur Income Tax or National Insurance on the difference, while selling shares will mean that Capital Gains Tax is owed.
Issuing options is an effective way for start-up businesses to compensate employees as it gives employees the power to buy stocks in the future at a specific price.
This can incentivise employees to create value in the company, encourage people to work for the company for longer and, when an employee buys stocks, they will benefit from the tax savings that come with EMI.
Cross options also empower shareholders to buy and sell their shares to other shareholders.
In certain circumstances, a private company may buy its own shares from shareholders who want to sell some or all of their shares but are unable to find a buyer.
The tax liability can vary depending on the circumstances. It’s likely that there will be an income tax charge as when a company buys shares from a shareholder, income distribution occurs. Capital Gains Tax may also come into play so it’s important to seek advice to determine whether the transaction incurs Capital Gains Tax.
There are also a number of legal requirements to satisfy and consider in accordance with Companies Act 2006, so you should discuss your options with our team to ensure that the process is as simple as possible for all parties.
Many companies offer shares as a form of bonus. Issuing shares as a bonus to existing shareholders doesn’t require payment from the individual, as they are paid for by the company’s profits and this isn’t considered a distribution under the Companies Act 2006.
This may be an alternative to issuing dividends, however, it can be a complicated process that is easy to get wrong - particularly for companies with many shareholders to consider. We work with you to ensure that the process is fair, simple and legally compliant, and is the best possible way forward for your business based on its unique needs.
A joint venture is a commercial arrangement between two or more parties and covers a range of business arrangements that are established to achieve a collective objective.
Parties may choose to enter a joint venture to expand their business, develop new products or enter new markets. There are a number of benefits involved, however, in order to reach that point, it’s essential for any parties seeking to create a joint venture to work with a professional to establish their strategy, objectives, commitments and ensure that they remain compliant.
Every joint venture is different, so we work with you to understand what you hope to achieve and how we can help you reach these aims. Common joint venture structures include a company limited by shares, contractual ventures, limited liability partnerships and a general partnership or limited partnership. Each has its own advantages and disadvantages, so it's worth discussing your options with a professional.