Legal Practice Notes

Most family-run enterprises are in private hands rather than publicly listed. Consequently, the governance framework designed for quoted companies, such as the UK Corporate Governance Code ( UKCG Code) and the FRC Guidance on Board Effectiveness, tends to be of only peripheral relevance to them. Evolution of the board in a family business In the typical nascent family venture, the founder entrepreneur usually leads the board, with relatives commonly in supporting positions within the business. That said, even among sizeable, longstanding family firms, boards frequently comprise a family majority, particularly in well-established businesses of significant scale. A central challenge, if the business is to endure and prosper, is shaping a capable board—one that harnesses the owning family’s advantages, recognises and offsets skill gaps, whilst delivering clear and robust strategic direction and diligent oversight. In reality, the board, its make-up and remit must mature in step with the...

Principle 9 In March 2010, the European Confederation of Directors' Associations (eco Da) released Corporate Governance Guidance and Principles for Unlisted Companies in Europe. It sets out 14 principles that family enterprises can adopt in a staged or phased way to shape a governance framework suited to their needs, considering the company’s size and the ownership group’s complexity. Principle 9 champions sound governance in family-controlled businesses and recommends putting in place family governance mechanisms that encourage coordination and mutual understanding amongst family members, whilst also organising the relationship between family governance and corporate governance. This reflects the long-accepted view in the family business field that any strategy seeking to optimise a family’s financial, intellectual and social wealth must include practical guidance on governing the family well. Yet the eco Da guidance unfortunately blurs ‘family’ with ‘owners’. These are separate interests that require distinct...

This Resource Note brings together commentary, analysis and tools to aid interpretation of, and deliver practical guidance on applying, UKLR 5 of the UK Listing Rules, which prescribes the requirements for admitting equity shares to listing in the equity shares (commercial companies) category (also referred to as the commercial companies category). Materials addressed in this Resource Note include, where relevant: the Financial Conduct Authority ( FCA) Handbook FCA guidance in its Knowledge Base— Procedural notes and Technical notes (which constitute formal guidance and are binding on the FCA) FCA consultation papers ( CP), discussion papers ( DP), policy statements ( PS) and feedback statements ( FS) Primary Market Bulletins and other FCA publications former UKLA technical and procedural notes and the UKLA’s newsletter List!, where still relevant to the interpretation or application of a provision ...

The Practice Note sets out the law as it stood before 18 May 2021. It summarises the post‑ Brexit challenges for UK financial institutions that previously accessed EU markets through passporting rights. It also examines the UK’s position as a third country (a jurisdiction outside the European Economic Area ( EEA)), equivalence considerations, and the UK’s post‑ Brexit status for financial services firms. Brexit and financial services This note outlines the issues encountered by UK firms that formerly conducted business across the EU via passporting and the implications arising from the loss of those rights. This Practice Note sits within a suite of key notes on Brexit and financial services. Other guides include the following: Brexit— Financial Services—overview Brexit and financial services: materials on the post- Brexit UK/ EU regulatory regime [ Archived] Brexit—impact on financial services [ Archived] Brexit and...

The principle defined Company decisions are taken by shareholders through resolutions. A company’s resolution can be validly approved in three ways: by employing the statutory written resolution procedure (available only to private companies and subject to specified exceptions) (see Practice Note: Written resolutions for further details on this process) at a meeting of the company’s members, duly convened and conducted in accordance with the Companies Act 2006 ( CA 2006) or the company’s articles of association (see Practice Note: Member resolutions for further information) where applicable, under the Duomatic principle, described in Re Duomatic Ltd as: '...where it can be shown that all shareholders entitled to attend and vote at a general meeting agree to a matter that such a meeting could give effect to, that agreement is as binding as a resolution would generally be.' It has subsequently been restated as: ' The essence of the...

Understanding the impact of a corporate transaction on the company's share incentives Where a company undergoes a corporate transaction, existing share incentive awards over its shares are frequently affected. Identifying the likely effect at the earliest planning stage is essential, as share incentive considerations can prove decisive for the proposed structure, mechanics and/or timetable, and may otherwise force later changes to the transaction solely to accommodate them. This is particularly relevant where: a substantial proportion of the share capital is covered by share awards key individuals, or a significant part of the workforce, hold such awards there is an employee benefit trust ( EBT) This Practice Note outlines the steps typically required on any transaction when addressing its share incentives elements (see: Steps which will normally need to be taken below)......

Company records The Companies Act 2006 ( CA 2006) imposes specific duties on companies to keep particular records. Company records cover any: register index accounting records agreement memorandum minutes other documents required by the CA 2006 (or its predecessors) register of debenture holders A company may hold its registers in paper or electronic form, so long as statutory conditions are satisfied; for instance, if stored electronically they must be capable of being reproduced as a hard copy and safeguards should exist to protect against falsification. This Practice Note focuses on keeping records of shareholders’ and directors’ meetings. For information about a company’s registers, see Practice Notes: Company records—a company’s statutory registers and Company records—a company’s non‑statutory registers. Members' resolutions and meetings Records of resolutions, meetings and decisions of the sole member All companies are required to keep: copies of all...

This Practice Note sets out practical guidance on the correct execution of simple contracts and deeds by administrative receivers... Quick view The summary below outlines the execution formalities relevant to administrative receivers and points to the location of matching precedent execution clauses. For more detail, navigate to the document type using the links in the first column... Document type: Simple contracts By the company ( Companies Act 2006, s 43(1)(a)): Using the company’s common seal, applied by the administrative receiver under the power in the debenture under which they are appointed — Execution clause—administrative receiver—contract ( Option 2). By the administrative receiver’s signature under the power granted in that debenture, signing in the presence of a witness — Execution...

Warranty and indemnity ( W& I) insurance in M& A transactions W& I insurance can be used in private company sales and purchases, whether the deal is a share sale or an asset sale. The buyer or the seller may arrange cover for losses arising from breaches of the seller’s warranties or indemnities set out in the relevant share purchase agreement or asset purchase agreement (the acquisition agreement), including any tax indemnities under a tax covenant. Although chiefly applied in private company M& A, it may on occasion feature in public company transactions where the target or its shareholders provide warranties. As well as allocating risk, parties frequently use the policy tactically: a bidder in a competitive auction can separate its offer from rivals, and sellers can reduce sums locked in escrow and realise proceeds more quickly. In the UK and other...

This Practice Note outlines the nature of waiver and release within commercial contracts, distinguishes between them, and summarises the clauses that address waiver (commonly called a ‘no-waiver’ clause) and release. The waiver clause is widely recognised as a boilerplate provision aimed at preventing unintended waivers of legal rights from taking effect, including the right to terminate after a breach of contract. What does ‘waiver’ mean? In contract law, ‘waiver’ may carry different senses, but most often describes a concession granted by one party whereby it does not demand strict performance by the other of a contractual duty, whether before or after any breach of the term being waived. For discussion of other potential meanings, see: Waiver: Halsbury’s Laws of England [251]. Types of waiver Express Implied from conduct In either case, it must amount to an unequivocal representation arising from a positive and...

This brief overview explains the steps for voluntarily removing a company from the companies register under section 1003(1) of the Companies Act 2006 ( CA 2006). It excludes removals initiated by the Registrar of Companies, which are addressed in Practice Note: The Registrar's powers to strike off a defunct company. For an in‑depth examination of the statute, case law and process regarding striking off a company, see Practice Note: Voluntary striking off and dissolution. For a practical, step‑by‑step outline of the procedure for striking off a company, refer to Flowchart: Voluntary striking off—flowchart. Check that the voluntary strike off procedure is suitable Before making the strike off application, the company’s management and/or advisers should assess whether the process is appropriate. It is typically only appropriate for a solvent company with comparatively simple affairs and assets that are...

Venture capital is a form of private equity finance supplied to early-stage, start-up companies with limited or no trading history, aimed at backing businesses at the outset. Background to venture capital investment The combination of a short operating track record and, in many instances, an unproven business model underpinned by untested technology means committing funds to these companies is a high-risk strategy. Investors who focus on such ventures will typically contribute technical capability as well as managerial expertise to the management team, but, given the risk profile, they will also seek high rates of return on the capital they deploy. Why seek investment? Businesses that pursue venture capital are generally too small to raise capital in the public markets and are unable to secure debt finance, so equity investment becomes the viable route to funding growth. Types of investment and...

This Practice Note explores how an offeror can amend or prolong its offer and accelerate particular parts of the offer timetable by serving an acceptance condition invocation notice or issuing an acceleration statement. It also looks at the treatment of alternative offers and the way the City Code on Takeovers and Mergers governs competing bids during the later stages of an offer process. Revisions Sometimes during the course of an offer, an offeror may wish to alter its terms, particularly where there are competing offers or the offer is not recommended by the offeree board. Greater flexibility is available when the transaction is structured as a contractual offer rather than a scheme of arrangement, given the need to accommodate the court timetable in the scheme process. However, whether the deal is structured as an offer or a scheme, the parties should remain mindful of...

Rule 7 of The City Code on Takeovers and Mergers ( Code) This Resource Note summarises the key provisions of Rule 7, covering: (a) the obligation to make an immediate announcement where an offer is revised, (b) the situations in which connected discretionary fund managers and principal traders are considered to be acting in concert with an offeror or potential offeror, and (c) the impact that acquiring an interest in the offeree’s shares may have on the Panel’s readiness to permit a partial offer or a Rule 9 whitewash. It highlights relevant materials, commentary and guidance from the Panel on Takeovers and Mergers ( Panel), alongside Lexis+® UK analysis and resources, to offer practical assistance on the interpretation and application of Rule 7. Materials covered in this Resource Note include: Practice Statements issued by the Panel Executive (the body that undertakes the day‑to‑day...

Structure of public-to-private takeovers A public-to-private deal arises when an unlisted company purchases a listed company, causing the target to move into private ownership. Such transactions most often occur via a management buyout, in which senior executives of the listed business partner with a private equity house to acquire it. The acquisition is ordinarily implemented as either: a court-sanctioned scheme of arrangement of the listed company, or a general offer for the listed company’s issued share capital Commonly, a newly formed vehicle is created to effect the purchase. The listed target will usually operate share incentive schemes linked to its shares, sometimes extending them beyond key executives to the wider workforce. The buyer will wish to secure all existing shares in the listed target through the deal. Accordingly, the offeror must address how employees’ outstanding rights to acquire the target’s shares will be treated as part of the...

STOP PRESS Major changes to the UK prospectus framework took effect on 19 January 2026. The updated provisions for public securities offers and UK admissions to trading are primarily contained in the Public Offers and Admissions to Trading Regulations 2024, SI 2024/105 (the POATRs), together with the FCA sourcebook, The Prospectus Rules: Admission to Trading on a Regulated Market ( PRM). The UK Prospectus Regulation and the FCA Prospectus Regulation Rules are now repealed. The package aims to streamline fundraising and materially curtail the circumstances in which an issuer must produce an FCA-approved prospectus for a further share issue. For comprehensive details see Practice Note: UK prospectus regime reform. This Practice Note summarises the regime that applied before 19 January 2026. What is an intention to float announcement? An intention to float announcement ( ITF) is typically the issuer’s first public statement about an...

A Term Definition ABI See Association of British Insurers. Accelerated bookbuild or ABB A method for swiftly allocating shares to investors following the fundraising announcement, with minimal or no marketing. After the announcement, brokers/investment banks secure binding telephone commitments from investors to subscribe for shares, and the fundraising commonly completes the same day it is announced. Admission Generally, the entry of securities to trading on an exchange. More specifically, it refers to: (1) admission of securities to trading on AIM; or (2) admission of securities to trading on the Main Market and to listing on the Official List. See also admission to listing and admission to trading. Admission and disclosure standards The London Stock Exchange rulebook for companies with securities admitted to trading on its markets (excluding AIM) or seeking such admission. Admission document A document that must be...

What is a demerger? A demerger is a form of corporate organisation that separates businesses conducted by a company or group of companies, so that, following the demerger, the trading activities are run by independent management teams but remain, at least initially, under the control and ownership of all or any of the same shareholders as before. This approach is often undertaken in order to sharpen the management of discrete elements of the trading business, to ring-fence liabilities linked to particular trades, or to enhance shareholder value where the sum of the parts is considered greater than the wider conglomerate as a whole. There are several ways to carry out a demerger, including: an in specie distribution by way of a dividend of shares in the subsidiary being demerged to the parent company’s shareholders — typically the most...

The Companies Act 2006 ( CA 2006) and The Company, Limited Liability Partnership and Business ( Names and Trading Disclosures) Regulations 2015, SI 2015/17 (the Names and Trading Disclosures Regulations 2015) oblige UK companies to display specified trading particulars. These include information about the company’s registered name, share capital, its directors and the registered office. Corporate transparency reform—company names Government plans to modernise Companies House are far-reaching. The vision is for a comprehensive transformation of the registrar, positioning it as the world’s most innovative, transparent and trusted registry. Through these measures, the government seeks to enhance the Registrar’s contribution to the UK economy while strengthening its ability to tackle economic crime. The Economic Crime and Corporate Transparency Act 2023 ( ECCTA 2023) secured Royal Assent on 26 October 2023. Its provisions will be brought into force in stages, giving companies and Companies House time to...

Corporate transparency reform—duty to maintain an appropriate registered office address and registered email address The government is pursuing a bold programme to reform Companies House. The vision is a complete transformation, positioning it as the world’s most innovative, transparent and trusted register. The objective is to strengthen the registrar’s contribution to the UK economy while enhancing its ability to tackle economic crime. The Economic Crime and Corporate Transparency Act 2023 ( ECCTA 2023) obtained Royal Assent on 26 October 2023. Selected elements took effect on 4 March 2024 through The Economic Crime and Corporate Transparency Act 2023 ( Commencement No. 2 and Transitional Provision) Regulations 2024, SI 2024/269. Implementation of ECCTA 2023 will be phased over time, giving businesses and Companies House scope to get ready for the changes. Many measures will depend on detailed secondary legislation and guidance, alongside the...