An introduction to Corporate & Commercial Law (Company Commercial or ‘CoCo’)
Reasons to choose Wilson Browne
‘CoCo’ is our abbreviation for ‘Corporate & Commercial Law’ although some also refer to ‘Company & Commercial’ Law.
Broadly speaking, it encompasses advising businesses on all aspects of the business lifecycle; working closely alongside our employment and commercial property teams. This can go from setting up and getting the right business structure, through to terms and conditions of trade and then onto succession planning and exits. Ultimately, we help businesses at all stages of their lifecycle, whether a start-up, scaling up or dealing with succession planning.
Start-Up Services and Governance
Getting your business off to the right foundation is absolutely key; getting the wrong foundations can lead to problems being magnified at a later stage. Key aspects of your business to think about include:
1) Corporate structure – which business model is best for you? Will you trade as a sole trader, partnership or limited company? What governing and foundational documents do you need? Do you need bespoke Articles of Association?
2) Shareholder and Partnership Agreements – how will the relationship between shareholders or partners be regulated? What boundaries will you have, and what will happen to the business if one of you ceases to work (if there are more than two of you in business together, the short answer is ‘yes’ this is needed!)
3) Terms and Conditions of trade – What will your business do? What is your route to market? How will your relationship with suppliers and customers be regulated?
4) Business Protection and Compliance – What licences and registrations do you need to operate? How will you protect your business property, including name, processes and goodwill?
5) Premises – where will you operate from? Do you need any storage, and where will this be located? Are you going to buy a freehold or lease a property? What are the short, mid and long-term requirements of the business?
6) Employment – will you be engaging any employees? What are their terms and conditions of work, and do you have the right policies in place?
7) What is your purpose? You need to think about why you are setting up your particular venture. We don’t just work with businesses but also support charities, not-for-profit organisations and academies, all of whom also need to make sure that they have the right governance from the start.
Of course, it’s not only start-ups that may need these services, and many established businesses need to re-visit these aspects of their business on a regular basis to make sure that the legal structures that they have in place still reflect their commercial practice and business requirements.
Scale-Up Services
- Established businesses often look to grow, and there are many different routes that this can take, from organic growth to franchising and acquisitions. We can help with the legal documents that underpin any growth strategy, including:-
Funding Documents – looking to grow often includes procuring additional funding. We frequently advise on facility agreements and associated security documents so that you can go into any loan fully informed of the risks to you and the business that you operate. - Share Options – incentivising employees with share options has become increasingly popular and can be a great way to secure employee retention and growth. There are a range of schemes available, from tax-advantaged schemes such as EMI options (particularly useful for growth plans) and Employee Benefit Trusts to non-tax advantaged schemes such as bespoke share options. Either way, we work closely with our client’s tax advisors and accountants to put in place the right scheme for them.
- Tendering and complex agreements – seeking new contracts and customers are key in any business which is expanding. It’s not unusual for business owners looking to expand finding themselves in a tendering process and dealing with more complex framework and distribution agreements than when they started out. We can help translate the legal jargon so that you can not only proceed with confidence and understanding in your obligations but put forward a professional tender and enhance your ability to win the work.
- Franchising – franchising your business is one way to scale however, there are many complexities in franchising that need to be considered. As a business model, it involves granting another a right to operate a business under your direction and branding. Therefore, any franchise arrangement needs to carefully consider brand rights and ownership, franchisor support and director, scope of independence that the franchisee and ultimately the fees that they will need to pay to operate under the Franchisor’s umbrella. Working with both franchisee and franchisors gives us a unique ability to understand one another’s needs and approach any franchise in a commercial context.
- Acquisitions – many companies grow by undertaking acquisitions. They acquire similar or complementary, and in some cases competitive, businesses to expand their own service offering and support they can give. Acquisitions are complex and can be high risk for a buyer – therefore they frequently involve detailed due diligence, complex purchase agreements with warranties, indemnities and tax covenants as well as Disclosure Letters from the sellers.
We don’t expect you to know what all of this means as that is what we are here for – with specialists ready to help with the legal documents and advice, whatever your business needs and strategy.
Succession Planning
Succession planning is determining the future of your business and is often considered as a part of your own exit strategy. It’s not unusual for advisors to ask new business owners what their exit strategy is – as this can take time to bring to fruition and ultimately will influence the decisions made at both the Start-Up and Scale-Up stages. There are several elements which may be involved in succession planning, including:-
- Pre-Sale Due Diligence – if you are planning to exit you should first ensure that your ‘house is in order’. That is reviewing your business and its operations from an accounting, tax and legal perspective to ensure that there are no skeletons in your closet which will impact your plans (of course, if you have solid foundations and documents from your start-up and scale-up stages, the risk here is reduced!)
- Demergers and Restructuring – it’s not unusual as a part of planning your exit to need to restructure the business. It may be that you want to separate assets (for example moving land out of a trading business so that you can lease it back and retain that interest in the long-term) or separate businesses (there may be multiple income streams and you want to divide the two steams to make each more attractive to relevant buyers). Whatever the reason, we can work closely with your accountant and tax advisor to effect any necessary and appropriate restructure and prepare your business for the next stage.
- Management Buy-Out – this is where you train a senior team to take-over your business and often involves them buying out the existing owner when ready to step-down and retire. There are several aspects to this including transferring responsibility for management of the business on a practical level to ensuring that the right legal paperwork is in place to effect the buy-out on agreed terms.
- EOTS – Employee Ownership Trusts have become an increasingly popular business model. This is where rather than transferring the business to a key management team, you transfer the business to all of your employees. There are very tight regulations around this structure and you need to ensure that the legal paperwork and practical application both align and satisfy the relevant legislation.
- Retirement Sale – one of the most common reasons for selling a business is simply that the business owner is ready to retire. We have supported a multitude of clients with their sales, guiding them throughout the complex process to give them confidence in their sale and mitigate the risks to them post-completion.
Succession Planning is all about getting the right exit strategy for you and your business, whatever that may be. Our specialists will work with you and your other professional advisors to consider your options and journey on the right path for you.
