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MARRIAGE, FAMILY PROBLEMS & COLLABORATIVE LAW
EMPLOYMENT LAW
AGE DISCRIMINATION
AGRICULTURAL LAW
BUYING AND SELLING PROPERTY
BUSINESS LAW
WILLS AND TAX PLANNING
PERSONAL INJURY CLAIMS
MARRIAGE AND FAMILY PROBLEMS
Two of the partners in the department are accredited members of Resolution and Advanced members of the Law Society’s Family Law Panel. Resolution promoted a conciliatory approach to dealing with matters in a sensitive, constructive and cost efficient way. We are recommended in the Legal 500 for family work in the Northwest.
We have wide experience of high value divorces and have the necessary back-up expertise in our property, commercial and Wills/trusts departments. We had a Franchise from the Legal Services Commission for many years, but from April 2004, choose not to continue with this.
We are always delighted when our clients reconcile at whatever stage in the proceedings.
For a professional solution and experience in all aspects of family matters and financial claims call or e-mail Diana Williams, Denise Woodward or Jackie Rawcliffe.
For more information about divorce or the Children Act, read on.
For information about domestic violence, click here.
Divorce Procedure
The mechanics of obtaining a divorce are usually quite straightforward, particularly if the couple agree that the marriage is over.
At the present time, the only ground for divorce is that the marriage has broken down irretrievably. This can be evidenced by one of five facts:-
Your spouse’s adultery, unreasonable behaviour, desertion for a continuous period of 2 years or more, you have lived separately for 2 years and your spouse consents to be divorced or you have lived apart for 5 years or more (whether or not your spouse agrees).
A decision to petition for divorce is never easy. You can stop the proceedings at any time before your Decree Absolute. We will give you advice as to the least acrimonious method of obtaining a divorce. The most important consideration will relate to the practical issues such as how to separate, where to live, the arrangements for your children and financial matters.
Court proceedings in family law are usually private. This means that the public and press are not allowed access to the court papers, although the press are able to publish the fact that a divorce as been pronounced.
Pension Sharing
The availability of a settlement including, pension sharing orders, only applies to Divorce Petitions filed after 1st December 2000. Prior to that date, this may either be dealt with by way of set-off or earmarking orders.
Pension sharing divides a scheme member’s pension rights at the time of divorce. Where a pension sharing order is made, it will award a certain proportion of the scheme members’ benefits to his/her spouse. Often, we will advise that expert advice is needed regarding the division of a pension. The expert we use currently charges £400 plus VAT for a joint report. Basically, there are different types of pension schemes - a funded money purchase scheme, funded salary-related scheme and unfunded schemes.
Some schemes do not allow the spouse to become a member of the scheme and the pension credit will have to be transferred to a new approved scheme of the spouse’s choice, whilst unfunded schemes (money purchase and salary-related) schemes usually insist that the benefits for the spouse’s share are retained within the scheme and become subject to the scheme’s rules.
A pension sharing order will be expressed as a percentage of the fund.
The order cannot take effect until there is a Decree Absolute.
Pension sharing passes pension rights irrevocably to the spouse and is taxed as income of the person actually receiving the shared benefits.
The Court has a wide discretion under the Matrimonial Causes Act when dealing with the division of assets. However, there is an increasing trend towards the division of only those rights which accrued during the period of the marriage.
Once a pension sharing order takes place, whether the scheme member dies or survives is irrelevant to the former spouse as he or she has secured a pension share of their own.
The pension sharing order is not affected by either party re-marrying.
A pension sharing order cannot be varied.
There are benefits in pension sharing:
a. The pension credits are transferred irrevocably to the spouse.
b. The pension is not lost in the event of re-marriage or cohabitation.
c. The pension is not lost on the death of the former spouse.
The pension benefits are not available until a specified minimum age, determined by the pension scheme rules.
To obtain a current transfer value from the pension scheme usually takes about 12 weeks, so we will usually request this information early on when we are instructed.
We will usually ask you to obtain details of your SERPS (State Earnings Related Pension) as the Court can, if appropriate, make a pension sharing order in respect of the SERPS.
Children
The aim of the Children Act 1989 was to simplify the law and make it more consistent with the needs of the child rather than the parent. When a Divorce Petition is filed, a form is sent to the Court which will deal with the arrangements relating to your children. The law encourages couples to try and agree those arrangements for their children and usually only intervene when parents cannot agree.
The Child Support Act
Most child maintenance is now dealt with by the Child Support Agency, which is a branch of the Department of Social Security. The Child Support Act introduced a precise method of assessing maintenance. All of our solicitors are able to prepare the calculation and to advise you of the amount that you will pay or receive. The CSA deals with maintenance for a child where the child is under 16 or under 19 and in full time non-advanced education. Basically, the absent parent pays a percentage of his or her net income which is calculated as:
Number of nights of overnight care Child maintenance will be
by non-resident parent per year reduced by
52 to 103 1/7
104 to 155 2/7
156 to 174 3/7
175 or more ½ and deduct a further £7 per week per child
Ancillary Relief Application
Briefly, this is an application to the Court in divorce proceedings for the distribution of husband’s and wife’s assets. This may include maintenance, a transfer of property order, a lump sum order (an order that one party pay the other a capital sum of money) and the pension provision fund (where one party may be required to transfer some or all of their pension benefit).
It is important to give full and frank details of your income and assets at an early stage. We can then require the same from your spouse’s solicitor. We do our best to negotiate and reach an agreement and avoid unnecessary litigation which will have a bearing on costs.
The Matrimonial Home
This is often the most important asset of the marriage. From the first day that you consult us we will do our best to protect your interest and advise you what is likely to happen in your case.
It is important to be aware that some assets pass automatically on death without need for formalities. For example, if your house was held by you and your spouse jointly, then he or she would be automatically entitled to your interest in the event of your death. We can take steps to avoid this situation.
Wills
Divorce can affect existing Wills and entitlement. It is important to consider what is to happen to your property. We advise you to make a Will during the course of divorce, or immediately after.
If You Do Not Want a Divorce
There are alternatives we can advise you about, such as a separation agreement, which is an agreement made where the couple have actually separated.
Costs
Our Clients are always advised if they are legible for Public Funding at the first interview. If granted, you may be required to pay a contribution. You will also be advised about the effect of the Statutory Charge, which may mean you have to repay your costs out of any property or capital acquired as a result of the proceedings. Our firm took a view not to continue with Public Funding but if you are entitled, we will recommend other firms to you.
If you are not eligible for Public Funding, you will be advised of your solicitor’s hourly charging rate. Arrangements for the payment of costs will be agreed between you and our firm.
An Emergency Application
There may be difficulties, for example, where your spouse has removed your child from your care or is subjecting you to violence. We can assist you in such circumstances with an emergency application.
Advice on Welfare Benefits
We will always try to assist you or refer you to a specialist Welfare Benefits Agency in claiming all benefits available to you. If you are in trouble with debt, we will either assist you ourselves or refer you to the appropriate debt counsellor.
The Proceeds of Crime Act 2002
In the course of your proceedings in addition to your need to give full and frank disclosure of your financial and personal circumstance, the Proceeds of Crime Act 2002 (“the Act”) creates a number of offences relation to the proceeds of crime which include making it a criminal offence for you to enter into a financial settlement with your partner (or spouse) if you know that any income, capital or property of whatever nature which you and that person received or retains as part of the settlement represents the proceeds of crime. The proceeds of crime are any money, property, assets that have been accumulated as a result of any crime. The proceeds of crime include, for example, monies (however low in value) saved as a result of tax evasion or benefit fraud whether that money has been saved or spent.
If your solicitor becomes aware of or suspect the existence of the proceeds of crime in your case (whether from you or any other person), in order to enable the solicitor (or any other solicitor) to continue with your case without you and she committing an offence under the Act, your solicitor must report the irregularity to the National Criminal Intelligence Service (NCIS). NCIS will then give or withhold permission for your solicitor to continue with the case. Even if NCIS gives permission for the case to continue, it can pass the information received to any relevant body such as the Inland Revenue and an investigation may take place at any time in the future.
It follows from the above that, if you have any concerns about irregularities in your financial position or that of your partner or spouse, you may wish to seek specialist accountancy advice to correct those irregularities before the financial issues arising from the breakdown of your marriage/relationship begin to be resolved. Accountants are also required to comply with the provisions of the Act.
If your own financial irregularities or those of your partner or spouse are not corrected before you consult a solicitor and/or you do not tell your solicitor the correct position about your financial affairs or those of your partner or spouse if your solicitor becomes aware of such irregularities during the course of the case, in certain circumstance, she and you are required by the Act to disclose those details to NCIS. In certain circumstances, your solicitor may have to make a report to NCIS without telling you that she has done so. A consequence of not telling your solicitor about irregularities in your family’s financial circumstance would be to find that she is required to inform NCIS of the correct position without discussing the matter with you. In rare circumstances, one consequence of this could be that you resolve your financial relationship with your husband/wife/partner only to find that you then become subject to an Inland Revenue investigation and/or criminal proceedings.
In certain circumstances the obligations that the solicitor has under the Act override the duty of solicitor/client confidentiality.
If any fee earners engaged in your case spend time in addressing issues arising for you from the Act, that time will be charged in the same manner as any other work undertaken in relation to your case.
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EMPLOYMENT LAW
Employment Law is growing at a rapid rate, taking into account developments, not only in the UK, but also the impact on our law, resulting from our membership to the European Union. At Mason & Moore Dutton, we deal with employment issues from both perspectives – the employer and the employee.
For further information on Employment Law, read on.
For the Mason & Moore Dutton solution telephone, fax or e-mail Diana Williams.
Advising the Employer
It is wise to seek legal advise at the earliest opportunity before you take any decision relating to your employees. As a first step, every employee of whatever status has to be provided by law, within 14 days of employment, with written terms and conditions of employment which should include, amongst other things, disciplinary and grievance procedures. We regularly advise on draft Contracts of Employment which can vary from standard forms for large work-forces to more complicated Contracts of Employment for the senior executives.
We can also advise you on other issues such as questions of confidentiality, restrictions on competition and restraints on your former employees preventing, for example, touting for business after they leave your employment and the extent in which these can be included in their contract and are legally enforceable.
It is essential that your procedures are properly in place and you act in accordance with them. We can assist in advising you on how best to deal with such issues as re-organisation of a business, redundancy, how best to avoid a claim for unfair dismissal, maternity rights, health and safety issues, disability issues and questions of sex and racial discrimination.
Employment Law can be a minefield and we take great care to offer constructive and careful advice in a commercial context.
In addition to advising generally on good procedures for the employer, we regularly deal with negotiating termination of employment. If you are faced with a claim by an employee or former employee to an Industrial Tribunal, we can represent you right through to the end of the final hearing. We enjoy a good relationship with the many ACAS officers we deal with within the North West area. If it appears that you do not have a defence and the exercise is one of damage limitation, we will involve ACAS at the earliest possible stage in order to try to reach a settlement and limit the costs to you.
Advising the Employee
Again, it is wise to seek advice when you foresee a problem looming rather than when it has already happened and you have been dismissed from your employment. We can also advise you on how best to deal with difficulties at work when your job security does not appear to be actually an issue. If you are unlucky enough to be dismissed, do remember that you only have three months from the date of dismissal in which to lodge a claim with the Industrial Tribunal for Unfair Dismissal and six months from the date of dismissal for a claim for Redundancy, otherwise, you will be Statute-barred from making a claim. Do also remember that the qualifying period for making claims for Unfair Dismissal and Redundancy remains at two years at the present time. If you are seeking advise on discrimination of whatever nature, there is no qualifying period for making a claim.
If you are dismissed, we will advise you to exercise any internal right of appeal against dismissal that is available to you but you should not delay making your claim to the Industrial Tribunal within the three month time limit whilst any internal appeal is still proceeding. Claims for Unfair Dismissal fall into two parts, the basic award and the compensatory award. How much you will be entitled to will depend on the facts of your individual case. You first have to establish that you were dismissed and secondly, that your employers acted unfairly in taking that action. Constructive dismissal is where they put you in a position where you are left with absolutely no alternative but to resign. Wherever possible, we would always advise employees against resigning as if they are to be successful in their claim, they first have to establish that they have been dismissed.
Costs
We will discuss these with you at the very earliest opportunity, usually at our first interview. As with other areas of litigation work in this office, we charge on an hourly basis and the fee earner will discuss the method of charging and billing and the likely overall costs of the case with you as the matter progresses.
Only in the court is Public Funding available and in a few Employment Law cases, you may be eligible. We will advise you immediately if you are.
Most cases in Employment Law are dealt with in the tribunal. As this is not a court, except in very unusual circumstances, if you win the case, the other side will not have to pay your costs. Equally, if you lose the case, except in exceptional circumstances, it is not likely that you will have to pay their costs.
No Public Funding is available at the present time in tribunals, except for legal advise and assistance under the replacement for the Green Form Scheme, which is very limited, when your financial position has to be roughly equivalent to being eligible for Income Support or Job Seekers’ Allowance. Win or lose, therefore, you will need to budget for being responsible for our costs. We will advise you fully with regard to costs.
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AGE DISCRIMINATION
Are you aware that by 2026 in the UK, half of everyone aged 16 and over will be aged over 50? Is your business prepared for the new legislation outlawing age discrimination that comes into force on 1st October 2006? This will cover every aspect of employment of every organisation in both the private and public sectors including, for example, vocational training. It can include discrimination against existing employees and recruiting employees because of the fact they are too young just as much as because they are too old. Under the new regulations the national default retirement age is 65, and compulsory retirement before that age is unlawful unless the employer can show that there is a legitimate business reason for it. If you are affected by any decision you intend to make that could be caught by the legislation, it is important that you seek legal advice at an early stage. Diana Williams, our employment expert, would be very happy to offer a free preliminary half hour’s interview.
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AGRICULTURAL LAW
Just as farming has become more specialised in recent years, so has Agricultural Law. At Mason & Moore Dutton, we are very experienced at dealing with the legal side of farming and land owing. Our expertise is recognised by the leading consumer guides – Chambers Directory and the Legal 500. The Legal 500 described our senior partner, Rory Lea, as “popular”! He is a member of the Agricultural law Association. For the Mason & Moore Dutton solution, telephone, fax or E-mail Rory Lea or T. Spencer Lea. For further information, read on.
Sales and Purchases of Farms and Agricultural Land
The principles are similar to the detail set out in ‘Buying and Selling Property’. Auctions are more common than with domestic and commercial property. Just as when you are buying stock, when the hammer falls, if yours was the highest bid, you have a binding contract to buy the land. It is important that you understand exactly what the terms of the contract are. We can look at the contract and advise you on the legal details of the property you want to buy before the sale.
Tenancies
There are now two distinct systems of tenancy agreement. Those created before 1st September 1995 are governed by the Agricultural Holding Act. The Act protects tenants from eviction, defines the landlord’s and the tenant’s obligations in relation to the property and restricts rent increase. Tenancies created after 1st September 1995 are governed by the Agricultural Tenancies Act, which does not grant such long-term protection for the Tenant as previously. An oral tenancy can be terminated by notice without continuing rights for the tenant. The provisions relating to tenants’ improvements, compensation and change of use, make it important that if you are letting land you have a properly drawn up tenancy agreement. We can help with this or advise a prospective tenant on the effect of any agreement he or she is asked to sign.
Succession Tenancies
Some tenancies created before 1984 have succession rights. Succession is by no means a forgone conclusion. We have acted successfully for both tenants in gaining succession tenancies and landlords in opposing the granting of succession tenancies. There are strict time limits and it is important that applications for succession are made within those limits. We can work with other expert advisors to present your case.
Claims and Disputes
A farmer may have a dispute with a supplier, a contractor or a neighbour, which cannot be solved amicably. Examples of problems where we have been able to pursue successful claims for farmers are where a neighbour blocked the farmer’s access to some land, when a bull purchased from a dealer failed in performing, resulting in a sizeable claim for lost production and when grass seed was adulterated, causing loss of a whole silage crop.
See also the sections on Business Law and Employment Law
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BUYING AND SELLING PROPERTY
Mason & Moore Dutton have an experienced team to deal with the legal side of property transactions. We have a checklist that you can download for buying and selling houses.
Below, you will find detailed information about buying and selling property. It is directed to residential property but the principles apply equally to commercial property. See our Commercial law page for more information on buying and selling commercial property.
Your home is likely to be your biggest investment. It may take 25 years to pay for. We offer personal attention of a partner or conveyancer with at least 25 years experience, to all property transactions. No cutting corners means no ‘bargain basement fees’. Competent conveyancing at fair prices.
Read on for further information or call, fax or e-mail Tim Parker or Sara McInnes for the Mason & Moore Dutton solution to property.
tim.parker@masonmooredutton.co.uk
sara.mcinnes@masonmooredutton.co.uk
Buying and Selling Houses and Flats
Your house is usually the largest investment you ever make. Often it can take 25 or 30 years to pay for. Unlike other investments, your house may be subject to all sorts of rights and restrictions. The solicitor’s role is to smooth the path as far as possible and to ensure that you know exactly what you are committing yourself to. Solicitors have a minimum of five years training and pass exacting examinations. Our knowledge of land law, contract, tax, trusts and planning law will guide you through the maze.
What Happens When You Are Buying?
First Steps
You agree a price with the seller or the estate agent. Make sure that any written offer which you make is stated to be “subject to contract”. Then give your solicitor details of the purchase. Contact your bank or building society to arrange a mortgage if you need finance for the purchase. We can give impartial advice on the different types of mortgage available and help in finding a source of finance.
What About a Survey?
The surveyor for your Bank or Building Society will make an inspection to look for any obvious faults and check that the property offers enough security for the loan you are taking. If this survey is negligent, you may have a claim but it is not intended to be comprehensive. You should seriously consider having your own survey carried out. There are two main types of survey available - the Royal Institute of Chartered Surveyors (R.I.C.S.) House Buyer’s Report and the full structural survey. The R.I.C.S. House Buyer’s Report involves an inspection of the visible parts of the property, but will not include detailed investigation of the roof or examining floors which are covered in carpets. The full structural survey is extremely comprehensive. The price of a survey depends n the value of the property. A Home Buyer’s Report for an average property will probably cost around £220, a structural survey may cost £500 or more. We can arrange for either type of survey to be carried out by a Chartered Surveyor.
What Does your Solicitor Do?
We obtain a contract setting out the terms of your purchase from the seller’s solicitor. This should be accompanied by details of all the rights and restrictions affecting the property. We make a ‘search’ and raise questions with the Local Authority to establish whether there have been breaches of planning law, whether there are plans for road widening or new roads near the property, if the road is maintained at the Council’s expense, etc. If appropriate we carry out mining and environmental searches and any other specialist searches which may be required depending on the area of the country in which you are purchasing. We raise detailed points on the contract and about the property with the seller’s solicitors. We investigate the seller’s title to the property. We establish what is included in the sale, whether anybody has any rights over the property, such as rights of drainage and rights of way, who maintains the boundary fences or hedges, etc. When we have replies to searches and enquiries, we will discuss the contract in detail with you so that you know exactly what rights and liabilities you have. Then if you have had a satisfactory offer of a mortgage and are happy with the property, you sign the contract pay your deposit and contracts are exchanged.
What is Exchange of Contracts?
Until you are ready to go ahead, the purchase is “subject to contract” and you or the seller can withdraw from the transaction at any time. Once you are ready and the seller is ready to go ahead, you sign one copy of the contract and pay a deposit (up to 10% of the price) and we exchange this for a copy of the contract signed by the seller. There is then a binding contract The date on which you will complete the purchase is fixed before or at the time contracts are exchanged and this date appears in the contract. Historically, completion was usually one month after exchange but it can be much earlier (or later) to suit all parties. If you do not complete on the agreed date, you are liable to pay interest to the seller and sometimes other damages. If you do not complete after the seller serves a formal notice, you will lose your deposit and may be sued in court by the seller for damages as well.
Insurance
On exchange of contracts, the property may become your risk for insurance purposes. If you are taking out a Building Society mortgage the Society will normally insure from the date of the contract. Otherwise, you should arrange insurance. We can do this for you if you wish. If insurance is not your responsibility on exchange of contracts, remember to insure from completion.
What Happens from Exchange of Contracts
When contracts are exchange, your solicitor prepares the Transfer deed and Mortgage deed and carries out final searches to ensure that the seller has not suddenly taken out another mortgage on the property or become bankrupt. If you are obtaining a mortgage loan, we certify to your Building Society or Bank, that you will have a good title to the property and order the advance cheque to arrive in time for completion. You will be asked to pay any money which you are providing before the completion day as we have to pay for the property by an inter-bank transfer or a bankers’ draft. In either case, the money has to have been cleared in our bank account before payment is made. On completion, we obtain the deeds to the property and binding undertakings from the seller’s solicitor that any mortgages will be repaid immediately from the purchase money. Without such an undertaking, if the seller’s mortgage is not repaid, you will not be the owner of the property, even if you have paid for it. Stamp Duty may have to be paid to the Inland Revenue. This is a tax charged on the transfer of the property. We will advise you on this point and arrange for payment. This will involve the completion by us of the Inland Revenue’s Land Transaction Return which must be sent to the Revenue with the stamp duty payment. Your title to the property is then registered at the Land Registry. The titles to all properties now have to be registered. The Land Registry issues a copy of the legal title which takes the place of the ‘deeds’ which used to be used to prove ownership. If you have a mortgage lender, the copy entries may be sent to the lender to hold as security. If you are a ‘cash’ buyer, you may leave the copies and other documents with us for safe-keeping in our strong room (we make no charge for this service). We do not recommend keeping deeds ‘under the bed’!
What Happens If You Are Selling?
First Steps
If you want to use an estate agent and have no particular links with one, we can advise on the agent who we think is best suited to your type of property. Let us know if you put your property up for sale, so that we may obtain copies of your deeds and other papers relevant to the transaction from the Bank or Building Society. We will then be able to help you to complete the Property Information forms which it is now common to provide for buyers. When you have a satisfactory offer for the property, you or the agents let us know and we will prepare a contract to send to the buyer’s solicitors.
What Does your Solicitor Do?
The process is really the reverse of when you are buying. The contract is prepared and details of all matters affecting the property in the deeds or on the Land Register are given to the buyer’s solicitors. Their questions are answered, your title proved, contracts exchanged, the Transfer deed approved and the matter completed. We make arrangements to pay off your mortgage from the sale proceeds. If you wish, we will also settle your account with your estate agents from the net proceeds of sale. If you are selling, you do not need to pay Stamp Duty. This is the purchaser’s responsibility.
What you Need to Do
Once a completion date is fixed, you should arrange for the meters to be read and ask the Council and the water company to give you council tax and water rate accounts up to the date on which you are leaving. Be sure that you will be able to move on or before the agreed completion date, or you may have to pay damages to your buyer.
What Happens If You Are Buying And Selling?
Often the biggest headache is co-ordinating your sale and purchase, especially if there is a chain of inter-dependent sales and purchases. We will try to orchestrate the whole process. If one party loses their sale or it is not possible for other reasons to co-ordinate sale and purchase, you may consider taking out a ‘bridging loan’ so that your purchase can be completed before your sale. We can help you to obtain this, but banks are understandably reluctant to let their customers take out open-ended loans. Unless you are able to pay interest on the loan for as long as it may tae to sell your existing house, a bridging loan is not for you. Otherwise, you will have to move out on the same day as your buyer moves in.
How You Can Help
We do not normally make a physical inspection of the property which you are buying or selling, so please let us know:
· If it has recently been renovated or extended.
· If the access does not seem to be adopted by the Local Council.
· If there appears to be someone living there apart from the seller and his immediate family.
· If it is not properly fenced.
· If there appear to be rights such as footpaths over the property used by other people
· What items are to be included in the sale or purchase in the way of furnishings and fittings.
Commercial Property
Much of what has been aid about residential property also applies to commercial or business premises, but it can be more complicated especially if you are buying or selling a business as well as the property. We will be happy to discuss commercial transactions with you. We have a separate leaflet for agricultural property.
What Will It Cost?
We are happy to give you a written quotation of our charges on residential sales and purchases.
THIS section of our website gives an overview of the system of buying and selling property. It is not a definite statement of the law and may not be accurate and up-to-date. We cannot accept any liability for any action or omission of anyone who visits our site. We will be happy to advise on specific cases.
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BUSINESS LAW
We have been advising businesses large and small since 1890. If you are setting up a new business, buying or selling an existing business or looking for day-to-day legal advice for your business, we can help.
In this section of our website we explain our services to businesses. Read on for further information on starting or buying a business, on starting a limited company, other company matters, leasing and buying premises, employment law, conditions and terms of business, divorce, wills and tax panning for business owners.
Starting a Business
If you are starting a business there are many ways in which we can help. One of the first decisions you will have to make is whether you will operate as a sole proprietor (or partnership if there is more than one person involved) or by using a limited company. We can discuss the merits of the different business mediums.
We also give property, contract and employment law advice and help with your choice of accountant and bank.
Buying a Business
If you are buying a business, you should take legal advice. We will make appropriate enquiries and negotiate the wording of the contract to reduce the risks. When buying a limited company, it is vital that you take legal and accountancy advice. The process of buying a company can be very simple. In theory, all you have to do is to ask the existing shareholders to transfer their shares to you, but remember, that buying a company is not like buying a business from a sole trader. If you buy a business, which is not a limited company, you are only liable for its debts and past contracts if you agree to be.
If you buy a company, the company continues to be responsible for all its debts, contracts, etc. A company comes with its liabilities as well as its assets. Last year’s profits may have all been paid to the shareholders, but has the Corporation Tax been paid? The factory may belong to the company, but is it mortgaged to the bank? Does the mortgage secure other liabilities of associated companies or of the directors? Does the company own its trading name? We cannot guarantee that the information which we are given by the sellers or their solicitors is correct. However, it may be possible to agree retention of part of the purchase money for a time pending, for example, confirmation of tax liabilities or subject to specified profit or turnover figures being achieved, but in the end, the purchase of a company rather than buying its assets is almost always for the seller’s benefit (there can be significant tax savings selling the shares rather than selling the assets and then extracting the sale proceeds from the company). Don’t forget that, if you buy a company which owns capital assets such as a property, its acquisition value for calculating capital gains is the value when the company purchased the asset, not the value when you bought the company. The safest method for a buyer is to buy the assets and not the company itself.
Starting a Limited Company
We can provide a company, ‘made-to-measure’ or ‘off-the-shelf’. That is the easy part. Many people become shareholders in private companies without considering what will happen if they want to realise their investment. You may find it impossible to work with your fellow directors/shareholder(s). You may be unable to work through illness or be offered another opportunity which you want to take up. Unless you have a legally binding agreement with the other shareholders, you may not be able to obtain any payment for your shares. We can prepare a shareholder agreement, setting out the terms which the shareholders agree in relation to appointment of directors, sale or transfer of shares, etc.
Other Company Matters
If you need advise on any aspect of company law please contact us. From time to time you may need to alter the memorandum or articles of association of your company (these are the documents forming its ‘constitution’). You may want advice about the company’s powers or the legal position of the directors in certain circumstances. We advise on all aspects of company law.
Partnership
The formalities for forming and continuing a partnership are minimal. It is possible to find that you have become a partner of someone by mistake, because of the way a business deal is structured.
Partnerships are governed by an Act of Parliament dating from 1890. This outdated legislation often has unexpected effects on the partnership with no written agreement of its own. We can prepare a partnership agreement for you.
If you are joining an existing partnership, you may wish to take legal advice from solicitors independent of the partnership you are joining. We will be happy to assist.
Premises – Leasing and Buying
When you are buying premises for a business, the same principles apply as when buying a house, but some aspects, such as planning law, take on a greater significance. Becoming a tenant can be quite a culture shock for the new business proprietor. Many commercial leases run to 30 pages or more. We can help guide you through the verbiage. Remember that in some locations, there is still an over-supply of premises and landlords have had to become more flexible over the terms of their leases than they used to be.
You will probably have heard that the first tenant under a lease is no longer automatically liable for payment of the rent and observing the other conditions of the lease until the lease expires. Now when a tenant assigns his lease (transfers it to someone else) his liability ends. Although it is common for landlords to require the original tenant to guarantee the payment of rent by the first new tenant.
Employment Law
Employment legislation can be daunting for the small employer to the extent that some new businesses are inhibited from expanding. Some of the procedures, particularly in relation to dismissal, may seem longwinded, but provided you follow established procedures and act reasonably (in the objective view of the Tribunal), it may not be a worry. It is important that all employees have written statements of their terms of employment. We can help with these. Unless your business has a professional personnel/human resource department, you should speak to us before initiating dismissal procedures. If you are thinking of expanding, do not be put off by the Tribunal ‘myths’. Reasonable employers rarely have problems with employees. Just as it is important to define the terms of your staff’s employment, it is essential to have your relationship with your customers properly defined. Talk to us about your terms of business. If things do go wrong, we can help with debt collection and contract disputes.
Divorce, Wills & Tax Planning
We have separate web pages on these topics. We are experienced in the problems which divorce can cause the proprietor managed businesses.
Specialised Businesses
We act for a wide variety of businesses, from part-time owner-operated concerns with a turnover in the thousands of pounds, to businesses turning over millions of pounds. Among businesses with specialised needs, we deal with are professional partnerships, software licensing, the leisure industry (including liquor licensing, caravan parks, pub leases) food and drink manufacture, property development, engineering, motor dealers, haulage contracting (including operator licensing) and farmers.
Charges
Where no third party is involved, for example, if we are forming a company or preparing a partnership agreement, we are happy to give you a fixed quotation. In other cases, we can give you an idea of the likely costs. We would rather compete on quality of advice than on price, but you will find our charges more realistic for the small and medium-sized business than firms in larger cities.
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WILLS AND TAX PLANNING
Making a Will is something that everyone intends to do ……… tomorrow!
Dr. Johnson’s advice was, “Make your Will before you sup away from home”. By making a Will, you can make sure that your loved ones are adequately provided for, arrange for guardians to look after your children or benefit your favourite charities. If your assets exceed the limit for Inheritance Tax, then tax can often be saved with a properly drafted Will.
A simple Will is not expensive. We are always happy to give a fixed price for a straightforward Will and to discuss the likely charges for tax planning and trust advice. There are some Will writing companies who claim to be experts, but rarely have recognised qualifications. Your Will is too important to leave to chance. If you instruct a Solicitor, you will have the confidence that he or she is qualified to advise you and is properly insured.
For further information on Wills and Powers of Attorney, read on. For the Mason & Moore Dutton solution, telephone or e-mail Helen Davenport (a member of the Law Society’s Probate Section).
What can I Include in My Will?
Executors: You should name Executors in your Will. The Executors are responsible for ensuring that your estate, all your assets (your estate) are properly administered. Executors normally engage your Solicitor to carry out the detailed work. If you are leaving your estate to someone for life or to children under the age of 18 years, the Executors act as Trustees and hold the assets in their names supervising investments and payment of income. If you are leaving everything to your husband or wife, then, unless he or she is elderly or inform, you may wish to appoint him or her an Executor. You will need to appoint another Executor or Executors to deal with your estate in case your husband or wife dies first. You can appoint other members of your family or friends on whom you can rely. You may like to have an independent Executor, particularly if your Will creates a continuing trust. One or more of the partners in this firm can act as Executor. The advantage of a Solicitor-Executor is that a Solicitor has wide experience of acting as executor, is an expert in the administration of estates and has a wide knowledge of trust and tax law. Solicitors are used to dealing with investments and property and can also ensure that your wishes are carried out impartially in case of any disputes among your beneficiaries. Above all, from your beneficiaries’ point of view, we are readily approachable and not part of some large and impersonal organisation. Our only duty is to the beneficiaries and to the wishes of the deceased. We do not have any conflicting commercial interests. For a continuing trust, we will, where practicable, use your stockbroker, accountant or estate agent.
Guardians
If you have children under 18 years of age, you should appoint guardians in your Will who will look after your children if you and your husband or wife should die while they are minors.
Funeral and Burial Arrangements
Many people like to specify in their Wills whether they wish their bodies to be cremated or buried.
Personal Belongings, Valuables, etc.
Many people like to leave certain items to specific beneficiaries, jewellery or antiques for example. It may prevent family disagreement if you have specified who is to have what. Remember that even if you have left an item to somebody, you are still free to dispose of it during your lifetime. Then the gift in your Will cannot take effect. Items which you replace from time to time, can be covered in your Will, for instance by leaving “Any motor car which I own at the date of my death”.
Property
Any properties which you own can be left to a specific beneficiary either absolutely or to use during their lifetime. Again, however, if you name a property and you no longer own it at the time you die, the gift will not be effective unless you use a formula like that for the motor car above.
Legacies
You may wish to leave specific sums of money to friends or charities even if most of your estate is to go to your family.
Residue
At the end of your Will, you should say who should inherit the rest of your estate, even if you think that there will be nothing else. After all, you might win the lottery or inherit something unexpectedly.
Children and Grandchildren
If you are leaving a legacy or a hare of your estate to children or grandchildren, they will normally inherit at the age of 18 years. You may specify a later age if you wish. Until they reach the specified age, the Executors hold the money or property and invest it as necessary, accumulating the income or paying it to the beneficiaries’ parents. If you want to specify a higher age than 18 years for inheritance, there may be taxation implications as regards the income. We will be happy to discuss this.
Investment of Money for Someone With a Life Interest or a Child
Trustees may only invest in certain specified investments unless the will gives them wider powers. We can discuss this with you. If we are acting as Trustees, we always take appropriate professional advice on investments where necessary.
Can I Save Inheritance Tax?
At present, anything which you lave t your husband or wife is free of Inheritance Tax.
This may result in a large tax bill on the second death. You can mitigate this by lifetime gifts and by making use of the exemption for gifts to people other than your husband or wife.
There are other exemptions, including business assets and agricultural land, but there are some technical problems which need to be addressed in specific cases. There is also an exemption for gifts to charities.
It is not just a case of depriving the Inland Revenue – if you have a farm or business which you want your children to continue, this may not be possible if they have a liege tax bill to deal with. We are happy to discuss tax planning in details with you and, where applicable, your Accountants.
POWERS OF ATTORNEY
A power of Attorney is a legal authority giving someone the same powers to deal with your assets as you have yourself. A normal Power of Attorney cannot be used unless the person who gave it is fully capable of managing their own affairs. It is intended for use when someone is away or where someone wants to hand over management of their business or investments.
An Enduring Power of Attorney is a special Power of Attorney which may be used even when the person who gave it has become mentally incapable of managing their own affairs, but if that person who gave the Power does become incapable, the Attorney must register the Power with the Public Trust Office and give notice to relations, before continuing to use it.
If you ask us to prepare a Power of Attorney for an elderly friend or relative, we will have to see the person concerned to be sure that this is what they want. You will appreciate that this is a safeguard which you might be glad of yourself when you become old or infirm.
If someone is incapable of managing their own affairs and has not made an Enduring Power of Attorney, it will be necessary to apply to the Protection Branch of the Public Trust Office for a Receiver to be appointed. This may be a slow and expensive process so everyone should consider whether they have a relation, friend or professional adviser who they could rely on and to give that person an Enduring Power.
No responsibility can be accepted for any action which you take or documents which you have prepared other than in consultation with us. This guide is intended as an overview, not as a definite statement of law. It will not necessarily be updated every time that the relevant law changes.
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PERSONAL INJURY CLAIMS
When you are least expecting it and through no fault of your own you can suffer injury in a road accident, in an assault or, for example, through your employment. Such occurrences can lead to time off work, additional stress, inconvenience and expense. Diana Williams has nearly 30 years experience of handling accident claims, sometimes very substantial ones, and her colleague Jackie Rawcliffe also has many years experience. Both Diana and Jackie would be happy to offer you a free half-hour’s preliminary interview to discuss the possibility of you making a claim. We will always do our best to see that you are justly and fully compensated. If you have legal expenses insurance you do not always have to consult the solicitors to whom you are diverted by your insurers. We may be able to act for you and be backed by your insurers.
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