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07801 250 668secretary@uckfieldchamber.co.uk
Thinking of buying an existing business?

Whether you are new to corporate life or if you are a seasoned veteran in the acquisition game, there are considerations you must consider regarding the people who will be working for you.

If you are simply buying the shares of an existing business, there will be less work to do in some respects as it is simply the identity of the shareholders which is changing, and everything else will basically remain as is. Usually all that is required with a share sale is that a proper due diligence exercise be carried out and appropriate warranties given whilst negotiating the share sale agreement.

When buying the assets of a company, however, then there are added complexities, as you will be in all likelihood be subject to the TUPE Regulations, legislation which was originally implemented in 1981 as a safeguard against employees losing their jobs in the wake of an asset sale. TUPE will apply where there is a ‘relevant transfer’, i.e. either:

• a business transfer – A business transfer is where there is a transfer of a business or undertaking or part of a business or undertaking which is situated in the UK immediately before the transfer, where there is a transfer of an economic entity that retains its identity; or

• a change in service provider – For example, a company engaging a contractor to do work on its behalf, reassigning such a contract, or taking the work back in house.

If TUPE applies, then the employees engaged in the selling business will automatically become the employees of the purchaser and will transfer across on all their existing terms and conditions of employment. Getting sound advice on your potential employment liabilities is key.

TUPE is a big topic with huge consequences for purchasing businesses. If you would like to learn more about it, and other important aspects of buying and selling a business then please come along to our free seminar on 26 September. There will be an 8am start, with breakfast provided, and the seminar will last until 10.30. For more information, please click here.