What is the difference between corporate and commercial law?
In a law firm corporate and commercial are titles given to two related but usually separate groups. The distinction between the groups can differ across firms. The practice areas within corporate are closely linked and their work relates to the lifecycle of companies, as well as mergers & acquisitions. Commercial includes a broader range of practice areas such as franchising, intellectual property and sometimes litigation.
The common theme between these practice areas relates to issues arising from contract law.
What are the main services that corporate and commercial solicitors can offer my business?
To create or negotiate changes to commercial agreements in order to protect the business in the event that the other party fails to honour the agreement. A properly worded agreement will spell out what each party’s obligations are and what will happen if they fail to do their part correctly.
Corporate solicitors can also guide the business through difficult times so as to avoid falling foul of statutory obligations.
They can deal with the purchase or sale of a business to ensure that there are no hidden issues which a buyer might be exposed to and to maximise the sale price by addressing any issues before the business is offered for sale.
Can solicitors help with compliance with corporate legislation and regulations?
Can solicitors help with compliance with corporate legislation and regulations?
Does corporate and commercial law extend outside of the UK?
If an agreement is made with a party outside the UK then it should hopefully confirm that English law is to apply and English courts will have jurisdiction to hear any dispute. Each country has its own laws and it is important for local businesses to ensure that the law in the UK will apply.
What is the definition of a commercial contract?
A commercial contract is a legally binding document that puts one party into a binding position either to do something or not to engage in the stated activity. It’s used for businesses and organizations and its key requirement is to ensure that legal arrangements allow full benefits of the contract to be realised. Examples of such contracts include Purchase and Sale Agreements, Services Agreements, Distribution Agreements and Production Agreements.
Does a commercial contract have to be in writing?
The general rule under English law is that a commercial contract does not need to be in any particular form to be legally binding. As long as the basic elements of a contract exist – namely offer, acceptance, consideration, intention to create a legal relationship and certainty of terms then it does not matter if a contract is made orally or on paper or online. However to avoid any disputes as to the terms agreed it is always advisable to have the contract drawn up in writing.
The key issue when making contracts online is to ensure that the terms are properly incorporated into the contract – namely, the party accepting the terms has an opportunity to read them before accepting the contract. This can be done by having a link to the terms and conditions with a tick box to show acceptance. If the link to the terms is not opened and a party does not bother to read the terms, it is at the party’s risk and the contract will still be binding.
What standard terms should be put in a commercial contract?
How and when goods and services are to be delivered and payment is to be made, interest charges, retention of title for the supply of unpaid goods, any limitations of liability, indemnities, force majeure (especially useful in a pandemic), how the agreement can be ended (and any notice periods required), assignment rights, rights of third parties to sue, which country’s law will apply and in which courts proceedings are to be brought before.
What do I need to consider when buying a business?
How well do you know the business, its customers, debts and obligations, financial performance? Are you buying just the assets (such as goodwill) or the entire company by way of a share sale? Are any of the assets charged as security to a third party? Does the company have any debts that could be avoided by opting instead for an asset purchase? Will I need the seller to stay on for a period to ensure a smooth transfer? How reliant is the business on its workforce? Has it protected its intellectual property? In the case of an asset purchase, is the business operating from premises under a lease and if so can the lease be transferred to you?
Why does a business need a commercial lawyer?
To ensure that it is not subject to any unnecessary risk from its workforce, suppliers, customers, other stakeholders and its owners and to enforce its rights against other parties to an agreement. It is also important to ensure that a business and its owners comply with laws and regulations they are subject to or they could face criminal prosecution and civil claims by national or local authorities.
I am selling my business. Do I need a lawyer?
Yes. To ensure that a proper sale price is being paid and the sale is properly structured a lawyer is essential. The lawyer will assist the seller with due diligence and disclosure requests and negotiate changes to the sale agreement to try to ensure that following the sale the risk of any claims being made against the seller is reduced. If any part of the sale price is being paid following completion then proper protections such as additional security will need to be added to the deal.
What does commercial law involve?
It involves any type of agreement between a business and another party. This could include lease agreements, purchase and sale agreements, services agreements, distribution agreements, franchise agreements, shareholders’ agreements, employment contracts and supplier agreements.
What is the role of a commercial lawyer?
To advise a business on how to protect its position and prepare or negotiate changes to agreements to safeguard its interests. To advise business owners on how the business can operate to comply with the laws and regulations it is bound by and to protect the owners in the event that they fall out with each other or die or become so ill that they cannot carry on in their role.
A good commercial lawyer needs to be creative and strategic in order to advise their client on how to effectively structure and negotiate a transaction, and to find innovative ways to solve the unique issues in each transaction. They also need to be excellent project managers, since it is their job to supervise and coordinate all of the multidisciplinary efforts that go into advising a client on a transaction, and be able to distil all of the different advice and clearly communicate it to the client in form and substance so the client can make informed decisions on important issues.
Also, good commercial lawyers are great at managing projects, have a vast understanding of corporate law, they are able to understand the details and the bigger picture, exercise great judgment, communicate effectively with the client to ensure everyone is on the same page, understand the goals of the client, and are responsive.
What is bankruptcy?
Bankruptcy is a process whereby an Insolvency Practitioner (an individual authorised to carry out such work) collects whatever assets an insolvent person owns and uses them to pay whatever is possible to the persons who are owed money by the insolvent person (the bankrupt). The bankrupt is protected from claims being made by the persons he/she owes money to.
How to declare bankruptcy?
The application is now made online via a Government portal. The debtor uploads information about property or assets he/she owns and details of the debts. No court appearance is usually necessary.
What happens when you declare bankruptcy?
A trustee in bankruptcy (an Insolvency Practitioner) is appointed (usually the Official receiver in the first instance) who writes to the creditors and asks them to confirm how much they are owed and interviews the bankrupt to establish whether there may be other assets he/she owns which could be made available to the creditors. Enquiries may also be made to find out if the bankrupt has surplus income which could be paid to creditors. A bankrupt may not be involved in the management of a company and must not incur further credit without advising the lender of his/her position. The bankruptcy usually lasts for one year if the bankrupt fully co-operates.
How long does bankruptcy stay on the credit report?
Usually 6 years
What is personal insolvency?
The inability to pay monies owed when they are due for payment or when a person’s debts exceeds the value of their assets. This may result in a person either becoming bankrupt, entering into an IVA or a debt relief order.
How to become a personal insolvency practitioner?
To become an IP you must pass the JIEB exam and then obtain the appropriate insurance and be a fit and suitable person
What is an Individual Voluntary Arrangement?
It is an agreement between a person and his/her creditors whereby a sum of money which is usually less than the true amount owed is paid to the creditors over several years in full and final settlement of their claims. It is administered by an IP (a Supervisor) who puts the proposal to creditors, holds a meeting of the creditors and records their decision. If 75% in value of creditors vote in favour then the arrangement is approved and the creditors cannot then pursue the debtor unless he/she breaches the terms of the IVA.