We offer expert advice to entrepreneurs at every stage of the business life cycle with services ranging from advising on suitable business structures to set up your business to advising on the process and options available to exit or sell your company.
Business Ownership
Herrington Carmichael is a full service law firm offering legal advice to UK and international businesses as well as individuals and families.
Structuring your business
At Herrington Carmichael we have specialist Corporate Lawyers who can help you explore which business structures are suitable and advantageous to you from a legal and commercial perspective.
What business structures are available?
Navigating the intricacies of structuring a business can be difficult, but the implications can be significant. Your structure may also need to change as your business develops and matures.
Sole Trader – is an unincorporated business structure whereby a person owns and runs their business as an individual.
A Company limited by shares – a company which is a separate legal identity from its founders, benefitting from limited liability status for business debts. This type of business structure can be either public or private.
A Company limited by guarantee – a company which does not have share capital and which is most commonly used for not for profit organisations.
Unlimited Company – a company which does not have any limit on the liability of its members.
Limited Liability Partnership (LLP) – a hybrid between a limited company and a partnership which benefits from the flexibility of a partnership whilst still maintaining limited liability status.
Partnership – an unincorporated business structure which occurs when two or more people run and own a business together 'with a view to make a profit'.
Partnerships & LLPs
Herrington Carmichael advises clients on all aspects of partnership law and we are trusted advisers to individuals and firms in a wide range of sectors. Our team understands the commercial and practical challenges that LLPs and partnerships face and our advice is tailored to suit the needs of your business.
Our Corporate Team provide advice on a broad range of partnership related matters including:
- Setting up an LLP or converting your business from a general Partnership to an LLP
- Drafting a Partnership or an LLP Agreement
- Reviewing and advising upon the rights and obligations of a partner under an LLP or Partnership Agreement
- Exits and retirements from an LLP or Partnership
- Advising on the process for appointment or removal of a partner.
Joint Ventures
A joint venture is where two or more businesses decide that they want to work together on a particular project. Joint ventures can take a variety of forms and, our corporate team offer a full range of services in relation to joint ventures, including:
- The set up of the new business
- Drafting joint venture agreements
- Reviewing existing joint venture agreements
- Advising on the potential structures of a joint venture
- Advice on exits from a joint venture
- Drafting bespoke Articles of association for the new joint venture entity.
Shareholder Agreements
A Shareholder's Agreement is an agreement entered into by the shareholders of a company to regulate their relationship, the management of the business and the share capital of the Company.
A Shareholder's Agreement can be used to regulate how shareholders sell shares, outline shareholder rights on exit, and impose restrictive covenants.
Our specialist team of Corporate Solicitors have a breadth of experience in drafting complex and unique Shareholder's Agreements ensuring that each agreement is suitable for the structure and vision of the business involved.
Business Exit
Our M&A Team specialise in assisting and advising business owners with selling their businesses in a wide variety of sectors. As a full-service law firm, we are able to offer our clients solutions to a wide range of issues arising at each stage of the transaction.
Our corporate team has experience with business sales to include:
- Management buy outs
- Buy ins (including by way of investment)
- Sales to third parties
Business Ownership Disputes
Our Dispute Resolution Team advise business owners including partners, LLP members, and both majority and minority shareholders on disputes arising from the actions of their fellow business owners.
Our disputes services include:
- Director disputes
- Shareholder disputes
- LLP & Partnership disputes
Key contact
Insights
Get valuable insights from our articles.
Frequently Asked Questions
Find answers to your most pressing questions about our services and processes.
What are the benefits of an LLP Agreement?
There are many benefits associated with LLP Agreements for the members of an LLP. The most common reasons we see members wanting to set up an agreement include:
- An LLP agreement is a legally binding contract which can act as a written constitution for an LLP
- It provides greater flexibility outside of the default rules under the Limited Liability Partnership Act 2000 regulating LLPs.
- It provides greater clarity on rights, obligations and liabilities, and provides protection for partners and the business whilst also helping avoid lengthy and costly disputes
What are the benefits to a Joint Venture agreement?
There are many benefits associated with Joint Venture agreements for businesses.
- It outlines the key expectations of the Joint Venture partners and sets out clearly each joint venture partners rights and obligations including when the ownership interests in the joint venture can be sold
- It provides greater clarity on rights and obligations of the Joint Venture partners which provides protection for the joint venture partners and helps avoid lengthy and costly disputes
- A Joint Venture agreement is a private and confidential document
What are representations and warranties and how do they differ?
There are many benefits associated with Shareholder Agreements for businesses. The most common reasons we see shareholders wanting to set up an agreement include:
- Outlining the key expectations of the shareholders and setting out clearly each shareholder’s rights and obligations including when the shares in the company can be sold (which is not covered under the Companies Act 2006).
- Providing greater clarity on rights and obligations which provides protection for shareholders and helps avoid lengthy and costly disputes.
- Privacy & confidentiality. A Shareholder’s Agreement is a private and confidential document unlike Articles of Association which are a publicly filed document listed at Companies House.
What are typical provisions to include in a shareholders agreement?
- Director decision making and management: a Shareholder Agreement can determine matters such as the number of directors that must attend a board meeting for it to be validly held, the process for appointing and removing directors and whether there will be a chairperson with a casting vote.
- Drag along and tag along rights: drag along rights are a tool which enables majority shareholders to force minority shareholders to join in a sale of the Company. Tag along rights on the other hand, give minority shareholders the right to join in on a sale where a majority shareholder is selling their shares.
- Compulsory share transfers – Bad leaver provisions: bad leaver provisions can set out the circumstances where a shareholder will be forced to sell their shares, the procedure for doing so, and the price at which their shares will be sold at a reduced sale price.
- Pre-emption rights: Agreeing on express provisions in the Shareholders Agreement ensures that there is an agreed process for the sale of shares and clarity in relation to who the shares must be offered to.
What are Drag Along and Tag Along Rights?
Drag Along and Tag Along Rights are pre-negotiated compulsory share transfer provisions that are contained in a Shareholder’s Agreement and/or a company’s articles of association. It is vital that as a business owner or investor, that you fully understand the importance and implications of drag and tag along rights when purchasing or selling shares in a business.