LLP Case Shows Need for Members' Agreement  In any limited liability partnership (LLP), it always pays to have a clear written agreement in place as to what would happen in the event of the business ceasing to trade or the founders deciding to part company. If no such agreement exists, problems can arise, which is what happened in one LLP recently. When an ex-member sued the others for unfair prejudice, the High Court ruled - since there was no agreement in place - that default Regulation 7(1) of the Companies Act applied and the outgoing member was entitled to a third share in the net assets of the LLP. Always seek legal advice when setting up an LLP, because no matter how small the chances of a split seem at the time, things can change.
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Welcome to the October edition of our commercial law newsletter, keeping you up to date with all that matters in the world of business law.
The Bribery Act came into force on 1st July 2011 and was designed to overhaul pre-existing bribery laws. The Act creates offences that carry a prison term of up to 10 years and unlimited fines.
Company directors can be party to confidential information and can make any requests for information so long as it is judged to be reasonable. However, as one recent case shows, revealing this information to a new employer is not always legal. The principle that a director owes a duty of good faith to his company is well established and in this instance the High Court granted a former employer a ‘perpetual injunction’, banning the ex-director from disclosing specified information regarding a product after the two parties became involved in a dispute over shares. If you are engaged in a dispute with fellow directors or fear that your company may be damaged by the activity of an employee, seek legal advice without hesitation.
Businesses often seek to exclude or limit liability in their contracts with their customers. This may take the form of an expressly negotiated term but more often than not liability is limited or excluded by way of various “boiler plate” clauses in the business’ standard terms and conditions of business (“TOB”).
If you are a restaurant owner you had better make sure that all takings and tips have been declared, as HM Revenue and Customs (HMRC) has announced a probe into the under-recording of takings and cash tips at restaurants of all sizes. Restaurants, take-aways and other food establishments should be prepared for unannounced visits if HMRC believes that tax discrepancies are occurring. In serious cases, HMRC have been known to bring criminal charges which in turn can lead to potential asset confiscation. Read this story in full on our website and if you are concerned about your tax affairs, contact us for advice.
