De Minimis meaning

Parties Who are the parties involved? In particular, specify: the investor(s) the managers the investee company (newco) Conditions Are there any conditions to completing the investment? What are each party’s obligations to meet those conditions, and by what deadline? Share subscription What will the investee company’s capital structure be? Which class and how many shares will each shareholder (the investor, the managers and any other shareholders) subscribe for? Warranties Who will give the warranties? Is it limited to the managers? Will they be provided jointly, jointly and severally, or on a several basis? How wide will the warranties be? It is usual for investment agreement warranties to centre on the business plan and the managers, as the acquisition agreement generally affords the investor sufficient protection regarding the company. What restrictions will apply to warranty claims? These may include: periods within which claims must be notified caps on each warrantor’s liability and on...

Parties Who are the parties involved? In particular, specify: the investor(s) the founders the investee company Conditions Are there any pre-conditions to finalising the investment? What must each party do to meet those conditions, and by what deadline? Share subscription What is the investee’s capital structure? Which class and how many shares will each shareholder (the investor, the founders and any other shareholders) take up? Warranties Who will give the warranties—only the founders, or both the company and the founders? Will they be provided jointly, jointly and severally, or severally? How wide-ranging should the warranties be, and are there priority areas to cover? What limits will govern warranty claims, including: the period within which claims can be brought caps on each warrantor’s liability and on aggregate liability de minimis for individual claims and an aggregate threshold Board of directors How many directors will sit on the board?...

FORTHCOMING CHANGE: On 11 March 2024, HM Treasury opened a consultation examining the effectiveness of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692), which impose duties on a range of businesses to identify and prevent money laundering and terrorist financing. The government published its response on 17 July 2025, followed on 2 September 2025 by a draft statutory instrument and an accompanying policy note. The draft SI proposes a de minimis exemption from the requirement to register with the Trust Registration Service where, among other conditions, a trust with no UK tax liability also satisfies all of the following: it holds no interest in UK land; it holds no assets of significant value exceeding £2,000; it has not, since creation, held property with a cumulative value above £10,000; and its income does not exceed £5,000 per annum. This exemption would not be retrospective and would apply solely to new trusts set...

Mergers CMA adopts new phase 2 investigation process; publishes updated merger guidance and merger notice forms The CMA has released the final updated version of its guidance on jurisdictional and procedural mergers (CMA2), following a consultation in November 2023. The revisions chiefly concern the way the CMA will run its phase 2 merger investigations. The principal changes are: There will be chances for merging parties to engage directly with the CMA at an early stage. The issues statement will be dropped; instead, the CMA will request submissions on the phase 1 decision. Typically, there will be teach-in sessions and a new initial substantive meeting. In addition, there will be more use of update calls throughout the investigation, alongside broader opportunities for economic experts to interact with the CMA’s experts. An interim report will be issued earlier in the timetable, replacing the provisional findings report and setting out the CMA’s provisional assessment of the merger’s effects on competition...

Mergers The CMA has released the complete wording of its phase 1 clearance ruling, confirming clearance under the de minimis exception for proposed purchase by Keysight Technologies, Inc...

Subsidy control The Government publishes the Subsidy Control (Subsidies and Schemes of Interest or Particular Interest) (Amendment) Regulations 2025 The Subsidy Control (Subsidies and Schemes of Interest or Particular Interest) (Amendment) Regulations 2025 (SI 2025/845) (the Regulations) have been issued alongside an explanatory memorandum. Finalised on 10 July 2025, they will take effect from 4 August 2025. The Regulations put into effect a decision announced by the government in April 2025, following consultation on potential refinements to the subsidy control regime...

General principles The trustees are, for tax purposes, regarded collectively as a single person, distinct from the individuals who serve as trustees from time to time. An interest in possession (IIP) means a beneficiary has an immediate right to the trust income as it arises. That income belongs to the beneficiary, and the trustees lack authority to retain it, save to meet proper expenses. Where trust income does not fall within the definition of accumulated or discretionary income in section 480 of the Income Tax Act 2007 (ITA 2007), it is treated as the income of ‘other persons’ and taxed at the basic and dividend rates. Ultimately, the income is assessed on the beneficiary at their personal rates, irrespective of when, and even whether, it is actually paid to them. Nevertheless, the trustees are liable to income tax on income arising from trust property because they are the legal owners of that property and thus the persons who receive the income. The way IIP and discretionary trusts are differentiated...

This marks the first time the findings of a WTO panel have been taken on appeal under the Multi-Party Interim Appeal Arbitration Arrangement (MPIA). The arbitrators confirmed most of the panel’s contested legal determinations. What are the practical implications of this case? As the first appeal of a panel report invoking Article 25 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (Dispute Settlement Understanding) in conjunction with the MPIA, it offers direction for future appeals overseen by the MPIA, see Practice Notes: Introduction to the World Trade Organization Dispute Settlement and Multi-party interim appeal arbitration arrangement. What was the background? This was an Article 25 Dispute Settlement Understanding appeal to the MPIA concerning selected issues of law and legal interpretation arising from the WTO panel report, Colombia—Anti-Dumping Duties on Frozen Fries from Belgium, Germany and the Netherlands. The panel, established on 29 June 2020, examined the EU’s allegation that Colombia acted contrary to the WTO Anti-dumping Agreement by imposing anti-dumping duties on...

Services of general economic interest (SGEI) The notion of ‘services of general economic interest’ is not expressly defined in the EU Treaties or in secondary legislation. Its contours are set out in Article 14 TFEU and, in particular, Article 106(2) TFEU, which provides that undertakings entrusted with an SGEI remain subject to the TFEU unless applying those rules would impede the particular task assigned. Further, the development of intra‑Community trade must not be affected in a manner that runs counter to the EU’s interest. Protocol No 26 to the TFEU highlights the importance of SGEI and affirms the discretion of Member States in defining them. It also clarifies why there is no single EU definition: SGEI vary between Member States due to differing needs arising from distinct historical, geographical, cultural and social circumstances. The role of SGEI also evolves with technological progress and societal change. Member States must ensure: quality safety affordability equal treatment universal access protection of user...

Insert the following as new definitions (if not already included) in the definitions and interpretation clause of the share purchase agreement: 1 Definitions and interpretation Fairly Disclosed • means information [ fully, fairly and accurately ] disclosed [ (relating specifically to the subject matter of the Warranty and without omitting any fact which may render the Warranty and the matter disclosed untrue, inaccurate and misleading) ] and presented with sufficient clarity and detail to allow a buyer to reach a clear, informed and accurate evaluation of the relevant facts, matters or circumstances concerned; Losses • means any and all liabilities, costs, outgoings (including legal expenses), claims, actions, proceedings, damages, fines, penalties, loss of profit [ and Consequential Loss ]; Tax Warranties • denotes the warranties [ and representations ] contained in paragraph [ insert number ] of Schedule [ insert number ], and Tax Warranty refers to any one of them; Warranties • signifies the warranties [ and representations ] included in Schedule [...

Overview This questionnaire offers an illustrative set of questions intended to gather information to assess whether a specific transaction may fall within section 3 of the Enterprise Act 2002. It does not consider whether ‘two or more enterprises have ceased to be distinct’. It is prepared on the assumption that the deal involves the acquirer purchasing the target, which is an ongoing business. Consequently, if any of the jurisdictional thresholds is met, the deal will amount to a relevant merger situation. For further guidance on the application of the UK merger control regime, see A ‘relevant merger situation’ under UK merger rules. Once it is established that the UK merger control rules apply, additional and more detailed information will be needed to conduct a substantive review of the competition issues associated with the transaction and to identify any relevant economic market definitions. For more on the substantive assessment of UK mergers and on preparing the UK Merger Notice, see, respectively, The substantive assessment of UK mergers and Information request...

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Fittings Fittings, sometimes referred to as chattels, are not considered part of the land and, unless there is an express agreement to the contrary, they are not included in the sale of the property. In the absence of any such express provision, and on the assumption that the transaction required vacant possession, those fittings ought to have been taken away by the former landlord prior to completion. The general position regarding fittings left in situ at completion is, subject to the de minimis rule, that the seller must see to it that any goods and rubbish are removed from the property...