Legal Practice Notes

This Practice Note forms part of the Lexis+® UK Corporate private equity buyout transaction toolkit. Both the private equity investor and the seller should prepare for the conduct of due diligence so the process proceeds efficiently and does not needlessly impede the transaction’s progress. Private equity investor: due diligence preparations Type and extent of due diligence The investor should first determine which strands of due diligence to pursue, guided by the nature of the target business and the deal context (including the outline terms in the heads of terms). Legal Commercial Financial Tax Specialist (for example, actuarial) The scope may need to be narrowed by timing pressures (particularly in a competitive bidding process), or where transactional risk can be mitigated because the investor intends to arrange warranty and indemnity insurance (see Practice Notes: Warranty and indemnity ( W& I) insurance in M& A...

The purpose of due diligence As with an acquisition, risk management will be a prime concern for prospective joint venture ( JV) participants. Each party will look to safeguard its investment and role in the JV and will seek assurances that every other participant can meet its obligations under the arrangement. The conclusions of the due diligence review will influence whether the parties choose to proceed with the proposed JV. Where, for example, a party (the Transferor) is transferring assets and a business to the joint venture company ( JVC), the other party or parties (the Non- Transferring Parties) will want to confirm, among other matters, that: the Transferor holds good title to the assets the assets are in sound working order and their value matches expectations, and the assets are free of security and no third-party consents are required The parties will aim to identify any risk...

Issued in May 2011, this guidance was prepared by The Chartered Governance Institute (previously called ICSA: The Governance Institute) ( CGI) to...

This Practice Note outlines the terms typically found in a partnership agreement for partnerships established under the Partnership Act 1890. It provides an overview of the statutory default rules that operate where no agreement exists, alongside the clauses commonly adopted in a partnership agreement. Partners are, in almost every case, advised to put a partnership agreement in place, so as to prevent the application of unsuitable default rules under the Partnership Act 1890 ( PA 1890), or to augment the statute where it does not go far enough. The PA 1890 expressly contemplates that all partners may, by unanimous consent, vary their statutory rights and obligations......

Articles of association This Practice Note functions as a guide for the drafter when preparing and/or checking articles of association (articles) for a private limited company (incorporated in England and Wales) supported by a private equity (or venture capital) fund investor (the investor) together with the company’s founders in connection with a venture capital ( VC) transaction. The transaction comprises an investment into an existing company (the Company), under which the current shareholders (typically founders of the business) retain their previously issued/existing shares in the Company. Outlined below are matters to address when preparing and/or reviewing the principal provisions of such a document, when drafting and/or reviewing. Model articles The drafter will need to obtain instructions from the parties on which provisions of the model articles for private companies limited by shares, contained in Schedule 1 to the Companies ( Model Articles)...

Articles of association This Practice Note offers guidance for the drafter when preparing and/or assessing the articles of association (articles) of a private limited company incorporated in England and Wales, where a private equity or venture capital fund (the investor) participates alongside members of the target’s senior management team as part of a management buyout ( MBO). Outlined below are the matters to weigh up when reviewing and/or drafting the principal provisions of this document. Model articles The drafter should seek instructions from the parties on which provisions of the model articles for private companies limited by shares, as set out in Schedule 1 to the Companies ( Model Articles) Regulations 2008 ( SI 2008/3229) ( Model Articles), are to apply to the investee company in which they will hold their shares ( Company)......

At the preliminary stage of a private equity investment process, it is usual for the parties to enter into heads of terms which set out the principal terms of the investment. See Precedents: and Heads of terms—non-leveraged investment—equity. The document generally takes the form of a standard agreement, a letter or a term sheet. Nature and purpose The heads of terms outlines the principal commercial terms of the proposed investment. Except for certain specific exceptions, the document is not intended to be legally binding on the parties to it......

March 2026 Introduction Hong Kong stands as a leading international financial centre, regularly cited among the easiest places in the world for doing business. Its clear tax regime, established legal framework, solid financial markets, open flow of information, skilled workforce and the government’s enduring capitalist laissez-faire approach have encouraged thousands of multinational companies to set up a presence in the city. By the fourth quarter of 2025, Hong Kong demonstrated resilience, with real GDP for the quarter forecast to grow by 3.8% despite global economic headwinds. Today, the People’s Republic of China ( China) is the world’s second largest economy after the United States and remains one of the fastest-growing major economies. China is progressively shifting from “the world’s factory” towards a substantial consumer and financial market, supported by a more affluent population. Hong Kong’s geographic and cultural closeness to China, combined with its...

A dividend Companies possess an implied authority to distribute profits to members, except where the articles say otherwise. A dividend is one form of distribution available, and in practice it is the form most frequently used. It is the familiar route by which companies pass profits to their members. That said, a company has no legal duty to declare or satisfy a dividend unless the share rights stipulate such a requirement. Any member’s entitlement to a dividend arises solely from the shares they hold; rights to dividends attach to classes of shares. Such rights, if any, must be set out in the terms attached to the shares. A dividend cannot be declared or paid other than in line with the respective rights of the company’s shareholders. Distinct classes of share commonly carry differing dividend entitlements. Compliance with those rights is a...

Warranty and indemnity and contingent risk insurance in distressed M& A transactions HWF undertook an in‑depth interview programme with 17 market insurers to produce a paper delivering insight and clear, extensive guidance on how warranty and indemnity ( W& I) and contingent risk insurance are applied in distressed deals, mapping the solutions available and the key requirements to obtain strategic cover. What types of insurance cover are available for distressed transactions? For distressed transactions, three insurance options can be offered: Traditional W& I cover Traditional W& I cover can be used when: the seller and/or management provide warranties under the sale and purchase agreement ( SPA) or a warranty deed ( WD) the sellers give sufficient disclosure on the contents of the warranty suite in the SPA or WD a virtual data room or comparable document repository is available for review buyer due diligence (internal or external) has been completed...

Practice Note This Practice Note addresses the extra statutory and regulatory obligations that apply to UK listed companies concerning directors’ service contracts, drawing together the pertinent provisions of the Companies Act 2006 ( CA 2006), the Financial Conduct Authority’s UK Listing Rules ( UKLR) and the UK Corporate Governance Code ( UKCG Code) issued by the Financial Reporting Council ( FRC). It further signposts guidance from The Chartered Governance Institute ( CGI) and institutional investor best practice materials. All UK companies, including those with a listing, are subject to the requirements of CA 2006 in full......

The directors’ report plays a crucial role by giving shareholders insight into the company’s business that may not be evident from the financial information in the accounts. The framework for preparing the directors’ report is set out in Part 15 of the Companies Act 2006 ( CA 2006), which also specifies basic content requirements. More detailed rules on the content of directors’ reports are contained in regulations made under CA 2006, s 416(4). The exact obligations depend on the size of the company... Government withdraws draft corporate reporting regulations In October 2023, the UK government announced it would withdraw the draft Companies ( Strategic Report and Directors’ Report) ( Amendment) Regulations 2023 after consultation with companies raised concerns about imposing extra reporting requirements. Laid before Parliament in July 2023, the draft would have introduced several new corporate reporting obligations for very large UK...

This Practice Note sets out the statutory, regulatory and corporate governance regime for directors’ remuneration reports (including the directors’ remuneration policy), together with related practical guidance. Law and regulation The Companies Act 2006 ( CA 2006) and the Large and Medium-sized Companies and Groups ( Accounts and Reports) Regulations 2008, SI 2008/410 (2008 Regulations) require the directors of a quoted company to produce, annually, a remuneration report disclosing specified particulars of directors’ remuneration. Under CA 2006, a quoted company is a UK company whose shares are either listed on the Official List of the London Stock Exchange, listed in an EEA state, or admitted to dealing on the New York Stock Exchange or NASDAQ. The AIM market, the AQSE Growth Market (formerly NEX Exchange Growth Market), and overseas companies are not within the directors’ remuneration reporting regulations......

Declaration of a director's interests Any director who, whether directly or indirectly, has an interest in either of the following must, subject to limited exceptions, disclose to the other directors the nature and extent of that interest in line with the Companies Act 2006 ( CA 2006): a proposed transaction or arrangement with the company of which they are a director; or a transaction or arrangement already entered into by the company of which they are a director. For more detail, refer to the comprehensive Practice Note: Declaration of a director's interests—the statutory provisions. For practical help in determining precisely when an interest requires disclosure, see Flowcharts: Declaration of a director's interests—proposed transaction or arrangement and Declaration of a director's interests—existing transaction or arrangement. Some or all of the statutory rules on declaring a director's interests could also potentially extend to other companies and entities of various types;...

Released in June 2013, this guidance was issued by The Chartered Governance Institute ( CGI). It seeks to assist companies in comprehending and handling cyber risk effectively. It outlines the range of cyber risk categories that are relevant to companies and......

These resources comprise template Power Point slides that may serve as the foundation for one or more training seminars addressing directors’ duties and liabilities, with particular emphasis on the general duties contained in Part 10 of the Companies Act 2006 ( CA 2006). The materials are intended to support legal advisers, company secretaries, company members and directors in developing an understanding of the principal directors’ duties and liabilities, and they also include a link to additional useful materials and guidance. It is expected that trainers will use the slides as a practical starting point for their presentations and then adapt......

The Companies Act 2006 ( CA 2006) Under the Companies Act 2006 ( CA 2006), any payment by a company to a director for loss of office that is linked to the transfer of the whole or any part of the company’s undertaking or assets must be sanctioned by the company’s members. Such director‑related arrangements demand shareholder consent because they are seen as especially susceptible to misuse. How these approval requirements sit alongside the wider statutory duties owed by directors is considered in Practice Note: Directors' duties—scope, nature, interpretation and application. Among those general statutory duties is the obligation on a director to notify the board whenever they have, whether directly or indirectly, an interest in a proposed transaction or arrangement with the company of which they are a director, and to disclose to the other directors the nature and extent of that...

Introduction Partnerships, whatever their scale, still wrestle with shaping partner pay frameworks that feel equitable, drive the right behaviours, and underpin strategic growth. The environment is ever more intricate, demanding, and unpredictable; volatility and uncertainty now set the agenda for leaders worldwide. As organisations change, so must the mechanisms used to assess and reward owners. What are the implications for the partnership model, and how do firms build resilience to survive and prosper in this landscape? This Practice Note reviews the present landscape of partner remuneration, flags new themes and innovations, and tests whether a partnership’s approach is future‑proofed. Evolution of partnerships Partnerships were once small, collegiate enterprises. Partners typically worked from a single office, split profits on an equal basis, and seldom moved on before retirement. Over the last three decades, the professionalisation and...

ARCHIVED : This archived Practice Note distils a number of key and/or illustrative rulings concerning derivative claims, with a particular emphasis on judgments from June 2019 through to June 2025 inclusive. It aims to offer, in outline, a broad appreciation of the varied factual situations and issues that may arise in such claims, with a specific emphasis on decisions from 1 June 2019 onwards. It is not kept up to date and is provided purely for background information only. For further guidance on derivative claims, see the following Practice Notes: Derivative claim—what it is and when to use it Statutory derivative claim—the procedure Common law derivative claim—the procedure Case details and analysis Judgment date Case summary Chancery Division Chimbganda v Kundodyiwa ( Re Derivative Claim - Goodpeople Health Care Ltd) [2025] EWHC 1543 ( Ch) 19 June 2025 A noteworthy ruling where permission to pursue a statutory derivative claim was granted...

A minority member typically has limited ability to affect management or sway majority owners, and their interests may, at times, be overlooked. Where protection is required, a minority member can seek remedies in several ways, including: pursuing a derivative claim filing an unfair prejudice petition seeking that the company be wound up bringing a claim against a director personally (rather than in their capacity as director), where grounds exist This fundamentals note focuses on how a minority member may safeguard their position by advancing a derivative claim. For further detail, see Practice Notes: Derivative claim—what it is and when to use it, Statutory derivative claim—the procedure, Common law derivative claim—the procedure and Derivative claims—key and illustrative decisions [ Archived]. For other avenues and remedies available to a minority member, see Practice Notes: Unfair prejudice...