Corporate Services Blog

Thames Valley law firm, Charles Lucas & Marshall’s corporate services team has advised on the acquisition of Web on High Limited, based at Greenham Common, Newbury.

Generate UK

Generate UK Limited has acquired the whole of the issued share capital of Web on High Limited.

Web on High Limited provides search engine optimisation and digital promotion.

Rupert Wright, a corporate lawyer with Charles Lucas & Marshall advised on the acquisition on behalf of Generate UK Limited, Newbury which specialises in web and online marketing services.“This acquisition will be a valuable addition to our core business services and we expect it to provide a very helpful addition to our existing business customers,” said Joe Baily, managing director of Generate UK.

For further information contact Rupert Wright on 01635 521212 or e-mail rwright@clmlaw.co.uk

Business disputes detract the business owner away from their prime objective – to make money. Paul Trincas, Head of corporate services at law firm, Charles Lucas & Marshall, highlights the benefits of using mediation to resolve such disputes.

Business disputes, especially if they lead to litigation, can be costly. Courts nowadays, although they cannot compel anyone to attempt to resolve their business dispute, nevertheless expect the parties involved to at least have considered some form of alternative dispute resolution.

Mediation is one of the main forms of alternative dispute resolution – and one of the most successful.

•  Why use Mediation ?

Mediation is a process of resolving disputes which is a relatively informal procedure and, if successful, will avoid further acrimony, the potential costs of litigation and the risk and uncertainties involved.

• What is the success rate ?

Statistics show that the use of mediation to resolve business disputes has a high rate of success. Over 80 % of cases have a positive outcome to the parties.

• What exactly is mediation ?

Mediation is totally outside the court process and involves, in effect, a without prejudice meeting between the parties, facilitated by an appointed and trained mediator, whose task it is to find common ground and “steer” the parties towards a settlement.

• When to use mediation ?

Mediation can be used at any stage of a dispute. It can be used either before court proceedings or at any stage after court proceedings have commenced.

• What types of disputes can Mediation be used for ?

Any – that is the beauty of mediation. Trained and experienced mediators are available who have experience in virtually any form of dispute.

• What are the advantages?

If successful, the main advantages are:

It will bring finality to the dispute and certainty of outcome.

It will avoid either the costs of proceeding to court, or, alternatively, if court proceedings have started, it will avoid having to proceed to trial with all the costs and uncertainties involved.

It is independent of the court process and is a relatively informal procedure.

Although the mediator facilitates settlement, it is actually the parties themselves who come to their own agreement and model the terms of any agreement.

• What costs are involved ?

These can vary, depending upon the nature of the dispute, the amount involved, the time required and the mediator appointed.

There are many organisations which provide trained and experienced mediators.

The parties will have to pay the mediator’s costs, shared equally.

If the parties have a legal representative and wish to have their legal representative present, then the parties will have to pay for their respective legal advisors. It is normally only in the more complex or larger claims that parties wish their legal representatives to be present.

If the outcome of mediation is successful, then it is time and money well spent.

For further information contact Paul Trincas on 01635 521212 or paul.trincas@clmlaw.co.uk

If you are either a shareholder or a director of a company there’s a good chance you might at some point become involved in a director’s exit from a company. It pays to be prepared, says Peter Billyard, a corporate services lawyer with Charles Lucas & Marshall.

Peter Billyard

The removal of a director is invariably carried out in a less than harmonious atmosphere.

The way in which this may be done is set out in the Companies Act 2006 (‘the Act’).  All that is necessary is for a shareholder to propose an ordinary resolution to remove a director at the next general meeting of the company. This will require a simple majority of votes (ie more than 50%) cast at the meeting for it to be passed. However, should the directors refuse to call a general meeting, shareholders who own more than 10% of the company’s shares have the power to require the directors to call a general meeting.

If a company receives such a resolution, the Act states that the company should send a copy to the director concerned ‘forthwith’. The Act also requires that ‘special notice’ must be given in relation to the resolution to remove a director. This means that the shareholders’ meeting at which the resolution will be considered must take place more than 28 days after notice of the meeting has been given.

The director concerned has a right, under the Act, to be heard at the meeting at which the resolution is considered. He can also present his case in writing to the company.

The removal of a director under the Act is simple in principle. However, in practice it is a rather a cumbersome process.

Employee vs Director

It is important to be aware of the distinction between an executive director’s office and their employment. The termination of the employment role does not automatically affect that individual’s position as a director. In contrast it is not uncommon to find that a director’s service contract provides for his employment to end immediately after he resigns as a director.

The negotiation of an agreement between a departing employee and the company can be a difficult process. For instance, the director might wish to remain a director during these negotiations as in order to strengthen his bargaining position. Companies should remember that a director will continue to be entitled to attend board meetings and have access to board papers including accounting information. Any attempt to sideline a director by failing to give notice of meetings may affect the validity of any board decisions taken in that director’s absence.

Departing directors who also own shares in the company

There are further potential complications where a departing director is also a shareholder. In this case it is necessary to check the terms of any shareholders’ agreement that might exist. These frequently contain provisions in relation to the removal of a shareholder/director which make the process of removal more difficult. One simple example of this could be by increasing the percentage of votes required to pass a resolution to remove a director.

The subject of the buyback of shares from a departing director is another issue to be considered. One common sticking point is  the price of the shares. Many shareholders’ agreements provide for different prices of shares according to the reason for their sale. Typically, a higher price is paid if the sale is for reason of redundancy or ill health (called a ‘good’ leaver); a lower price is paid if the director is dismissed or simply resigns (called a ‘bad’ leaver).

For further information contact Peter Billyard on 01635 521212 or peter.billyard@clmlaw.co.uk