Substantial transaction meaning

STOP PRESS: The Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023) obtained Royal Assent on 26 October 2023. Part 1 of ECCTA 2023 introduces a substantial suite of measures that strengthen the role of Companies House and promote greater transparency across UK corporate entities. The Act will be brought into effect in phases over an extended timeframe. Numerous provisions will depend on detailed secondary legislation and accompanying guidance, alongside the development and rollout of new technical systems, processes and tools to implement the reforms. For further information, see Practice Notes: The Economic Crime and Corporate Transparency Act 2023—what Banking & Finance lawyers need to know, The Economic Crime and Corporate Transparency Act 2023—tracker, and Corporate transparency reform—changes to company registers. What are a company's constitutional documents?...

Purpose of checklist This checklist aims to set out the types of considerations that must be kept in view-and for which client instructions will be required-when preparing a joint venture agreement (JVA) and articles of association for a corporate real estate transaction. For further key points to address when drafting a JVA, see Checklists: Corporate joint venture preliminary issues-checklist and Joint venture shareholders’ agreement-checklist. See also Practice Note: Property Joint Ventures-general issues for a summary of the commercial matters the joint venture parties will need to weigh when establishing a property joint venture (JV). Corporate real estate JVs typically involve collaboration between parties able to source real estate (with one party possibly owning, and contributing to the joint venture company (JVC), the property to be developed), provide substantial capital to the JVC, supply or arrange debt funding (to finance the development) and offer the expertise to develop and/or manage the property. The JVA will document the parties’ agreement on their respective rights in relation to issues such as management...

When assessing an outsourcing arrangement, a number of competition law considerations arise. From a competition viewpoint, the principal questions are: whether the deal constitutes a notifiable transaction under merger control regimes, and whether the prohibitions on anti-competitive agreements are engaged. Overlooking these points can have serious outcomes, from agreements being void and unenforceable to substantial financial penalties. This Checklist offers a high-level summary of key issues and how competition law may affect outsourcing arrangements. An outline of an outsourcing The hallmark of outsourcing is that one or more external suppliers provide the customer with services for business processes previously handled in-house. Companies frequently move non-core functions—particularly IT, finance and HR—to specialist suppliers, sometimes offshore, who can offer cost-effective delivery due to: lower labour costs more modern technology, and sharing technology and infrastructure to support multiple customers. The scope of services transferred is often sizeable and may constitute a significant part of the customer’s...

If companies A, B and C are within the same capital gains group, and company A passes its shares in company B to company C in return for an issue of shares by company C to company A, the transaction can have the following tax effects: any chargeable gain potentially arising to company A could be exempt under the substantial shareholdings exemption (SSE) in Schedule 7AC to the Taxation of Chargeable Gains Act 1992 (TCGA 1992). For guidance on when the SSE applies to a disposal of shares, see Practice Note: Substantial shareholdings exemption for tax purposes, the share exchange might be treated as not involving a disposal by company A of its shares in company B, provided the conditions in TCGA 1992, s 135 are met and the anti-avoidance condition in TCGA 1992, s 137 does not apply...

The draft guidance sits within the overhauled consumer protection framework brought in by the DMCCA 2024 in the UK, substantial elements of which took effect in April 2025. For the first time, under the DMCCA 2024 the CMA can enforce consumer protection law directly via administrative processes, rather than having to pursue consumer rights through court proceedings. The CMA also holds fresh authority to levy penalties of up to 10% of worldwide turnover for infringements of consumer protection law. The CMA had earlier indicated it intended to publish definitive guidance on price transparency in Autumn 2025 and, until that final guidance is issued, said it will only pursue enforcement against ‘genuinely unexpected and untrailed mandatory charges added on at the end of a purchasing journey’. Why is price transparency important? DMCCA 2024 refreshed the legal framework to shield consumers from unfair trading, including tightening the rules on price transparency in the context of invitations to purchase (ItP) and clarifying price presentation when inviting people to buy...

Original news Re Pro4Sport Ltd (in Liquidation); Subnom Hedger (Liquidator of Pro4Sport Ltd) v Adams [2015] EWHC 2540 (Ch), [2015] All ER (D) 12 (Sep) The Chancery Division rejected a misfeasance application brought by the company’s liquidator under IA 1986, s 212 against the respondent, who had formerly been a director and the majority shareholder. The court concluded, among other points, that the allegation under CA 2006, s 172 did not succeed, and the respondent had not contravened his duty of care and skill under CA 2006, s 174... What was the background to the application? In 2012, shortly before Pro4Sport Ltd entered creditors’ voluntary liquidation, its director and majority owner arranged for the company to dispose of its assets to an associated entity, Pro4Sport.co.uk (Pro4), for deferred consideration of £56,400. The sole protection taken was a retention of title provision. Pro4 remitted £35,910 towards the price before itself entering creditors’ voluntary liquidation in 2014. The liquidator then pursued misfeasance proceedings against the director under IA 1986,...

In this issue: Court of Protection UK taxes for Private Client HMRC Manuals updates Budgets and Finance Bills Insolvency—Private Client Contentious trusts and estates Scotland, Wales and Northern Ireland International Question of the week Additional Private Client updates this week Daily and weekly news alerts LexTalk®Private Client: a Lexis®PSL community New and updated content Dates for your diary Trackers Latest Q&As Useful information Court of Protection Court of Protection approves indefinite extension of injunction against P’s son in order to protect and support best interest decisions made for P (MK (‘P’), In the Matter of) This matter relates to MK, an 81-year-old woman with vascular dementia. To safeguard court-ordered best interests decisions concerning MK’s living arrangements and care, the court continued, on an open-ended basis, an injunction limiting her son’s contact and preventing him from independently arranging medical assessments. The court determined it holds jurisdiction, under...

CASE HUB ARCHIVED –this archived case hub reflects the position at the date of the decision of 4 September 2012; it is no longer maintained. See further, timeline. Case facts Outline of the UK merger investigation into the completed and finalised purchase by DCC Energy Limited of certain selected oil distribution operations from Rontec Investments LLP, previously owned by Total UK Limited. Latest developments The CC determined the deal posed no competition issues whatsoever and did not lead to a substantial reduction in rivalry. Therefore, the CC approved the transaction unconditionally. Parties Acquirer—DCC Energy Limited (DCCE)...

Before disposing of a business or trade When planning a disposal, a corporate seller must choose the most suitable deal structure. Commercial drivers should lead, yet securing a tax-efficient outcome will inevitably be a key concern. The initial choice is whether to transfer: the business and its underlying assets (a business sale), or the shares in a subsidiary that holds the business and assets (a share sale) Broadly, sellers tend to prefer a share sale: it offers a straightforward exit and, where the substantial shareholdings exemption (SSE) applies, any gain is exempt from tax. An asset deal is more likely to crystallise tax charges and leaves any pre-completion tax liabilities with the seller. This Practice Note does not address individual sellers or business asset disposal relief (BADR). For more on BADR, see Practice Note: CGT—business asset disposal relief (formerly entrepreneurs' relief)...

The Companies Act 2006 (CA 2006) The Companies Act 2006 (CA 2006) sets out provisions that restrict and regulate substantial property transactions entered into between a company and its directors (see Practice Note: Substantial property transactions—requirement to obtain members’ approval). This Practice Note provides a summary of the CA 2006 provisions concerning the consequences where a company enters into a substantial property transaction without securing the requisite approval of the members, or without making the arrangement expressly conditional upon such approval being obtained, as required. For the purposes of these statutory provisions, ‘director’ includes any person occupying the office of director, by whatever name described, and also includes a shadow director. If the company undertaking a substantial property transaction has equity shares listed within the equity shares (commercial companies) category, the UK Listing Rules (UKLR), and notably UKLR 8 on related party transactions, may apply (see Practice Note: Equity shares (commercial companies) listing category—key continuing obligations)...

ORDINARY RESOLUTION [ That approval is given for the purchase by [ insert name of the director of the Company or the person connected with such a director ], being [ a director of the Company OR a person connected with a director of the Company ], of [ insert a description of substantial non-cash asset ] for a consideration of £[ insert figure ] from [ insert name of subsidiary ], the Company’s subsidiary, in accordance with section 190 of the Companies Act 2006. ] [ OR That approval is given for the purchase by [ insert name of subsidiary ], the Company’s subsidiary, of [ insert a description of substantial non-cash asset ] for a consideration of £[ insert figure ] from [ insert name of the director of the Company or the person connected with such a director ], being [ a director of the Company OR a person connected with a director of the Company ], in accordance with section 190 of...

ORDINARY RESOLUTION That, pursuant to section 190 of the Companies Act 2006, approval is hereby granted for the acquisition by [insert name of the director of the Company or the director of the Company’s holding company or the person connected with such a director], [a director of the Company OR a director of the Company’s holding company OR a person connected with a director of the Company OR a person connected with a director of the Company’s holding company], of [insert a description of substantial non-cash asset] from the Company for a consideration of £[insert figure]. OR That, in accordance with section 190 of the Companies Act 2006, approval is hereby granted for the Company to acquire [insert a description of substantial non-cash asset] from [insert name of the director of the Company or the director of the Company’s holding company or the person connected with such a director], [a director of the Company OR a director of the Company’s holding company OR a person connected...