Companies and Partnerships
Every company or partnership will need legal assistance at some point – whether when setting up a business, meeting legal obligations or preparing a shareholder agreement. We have specialist expertise to help and guide you so that you can concentrate on running your business.
The Partnership Act 1890 regulates all partnerships unless the partners of the business agree in writing something different. So if you don’t have a Partnership Agreement, your business will be regulated by a law drawn up in 1890.
Giving Notice with a Partnership Agreement
The Partnership Act 1890 creates something of a lottery for business because it states that any partner can bring a partnership to an end simply by giving notice, even verbal, to the other partners. If the partnership is dissolved then the business is closed and the assets are sold off by a court appointed receiver so, if one partner decides to leave, the business has to close.
Under a Partnership Agreement, you can decide how much notice you require your partner(s) to give you and whether any partner or only certain partners can bring the agreement to an end, thus protecting your business and assets.
Advantages of a Partnership Agreement
A lot of people don’t want to consider making a Partnership Agreement because it seems like you don’t trust your partner but it’s actually the opposite.
- Setting up a Partnership Agreement shows a commitment to the business and each other
- You can control the notice another partner has to give to leave
- You can control who can decide to dissolve the partnership
- You can protect yourself by added clauses that enable you to expel difficult partners
- A Partnership Agreement can help with obtaining finance because it shows the banks that you are serious
The Bribery Act for Businesses
The two main aspects of the Act that affect businesses are the commercial aspects of;
(a) bribing foreign public officials and
(b) the failure of commercial organisations to prevent bribery.
The offence can be committed by companies and partnerships as well as sole traders and also committed if a person associated with the business bribes another person. In addition, the offences can be committed outside the UK. An associated person is someone who performs services for and on behalf of the business. This includes employees but also other people working for them.
There is however a defence for some offences, if the company can prove it had adequate procedures in place designed to prevent bribery from being committed. It is therefore very important to put in place proper procedures as soon as possible and to make sure they are followed. The onus of proof will be on a company to show that they had adequate procedures in place.
If found guilty, the penalties under the Bribery Act can include up to 10 years imprisonment and an unlimited fine for commercial organisations.
What can you do?
You need to take action and put in place procedures and policies, bearing in mind that any measures should be proportionate to the size and complexity of the organisation (so the larger the organisation the more detailed the procedures need to be). Actions to take include:
- Prepare a memorandum note or report to the Management team summarising the changes to UK Law as contained in the Act.
- Appoint a senior member of staff to oversee procedures so that the ethos of the Act is built into the daily culture and processes of the organisation and that due diligence is always maintained for existing and future contracts/associations.
- Consider updating existing literature to outline the organisation’s zero tolerance commitment to bribery.
- Ensure existing contracts and future contractors or suppliers are aware of your policies and that they adopt a similar culture.
- Consider a risk assessment of how your business operates from grass roots level through to the top. Consider what associations the organisation has and what these associations do.
- Train members of staff and also associations that may be linked to your business.