I have now been in the Company Commercial department for nearly eleven months, having remained in the department to do a double seat. I cannot believe that I will be moving seats again in just over a month and I am due to qualify in September 2018 (which is an exciting but scary thought!). I have found my time in the Company Commercial Department so varied both in the type of transactions that I have been involved in and working with clients across many different sectors.
At Woodfines, employment law is encompassed within the Company Commercial department and I expressed an interest to get involved in employment law at the start of my time in the department. I have found that often employment aspects are involved in many company commercial matters, for example Directors’ Duties under the Companies Act 2006 which should be considered when drafting a Director’s Service Agreement. I am glad that Woodfines is flexible and has encouraged me to get involved in additional areas of law which I am interested in as part of a seat.
I thought I would give an insight into just some of the work I have come across and give a snapshot of what it is like to work in the Company Commercial Department (with some Employment law included).
Due Diligence for a Company being sold
By way of background our clients are selling their shares in ‘Company X’. Legal due diligence is a process whereby the Buyer’s solicitors investigate certain legal affairs of Company X. Practically this often involves a questionnaire being sent to the Seller’s solicitors which will contain requests for additional information as to the affairs and running of Company X. It covers a wide array of items such as the state of Company X’s Statutory Books, tax liabilities, data protection compliance, Health and Safety issues etc. The Seller’s solicitor will then liaise with their client and respond to the questionnaire. Any documentation to support and evidence such as responses is usually uploaded to an online data room. This is a temporary storage facility where relevant parties can upload and view documents relating to Company X.
The information received by the Buyer will be used to make an informed assessment of the potential risks and rewards of the proposed acquisition and will help the Buyer to decide whether they want to proceed with the transaction, to renegotiate the terms to reflect any issues identified, or withdraw from the transaction.The due diligence process can also highlight any problems or errors which the Seller can rectify prior to the sale as well as giving the Buyer a much more detailed understanding of the workings of the Company.
The outcome of the due diligence process will also be used when the Share Purchase Agreement is drafted to determine the inclusion and extent of any indemnities and warranties.
I have been reviewing company documentation, such as Company X’s Statutory Books, liaising with the clients and their accountants in order to answer the various due diligence queries raised by the Buyer’s solicitor. I have then assisted with collating the documents, drafting enquiry responses to the Buyer’s solicitor and uploading necessary documents to a data room.
A franchise is an agreement between two parties where the Franchisor grants the Franchisee a right to exploit a Franchise in return for payment. The Franchisor will provide its knowledge and assistance, for example commercial or technical assistance, for the duration of the agreement. The Franchisee will pay to the Franchisor an initial fee, royalties for advertising and the use of intellectual property rights, for example any trade marks. The arrangement allows the Franchisee to maintain a degree of independence whilst using the Franchisor’s established reputation. The Franchisor retains the ability to control the reputation and identity of the franchise as a whole and these documents tend to be drafted heavily in favour of the Franchisor.
It is usual that a comprehensive operations’ manual be created by the Franchisor outlining an introduction of the business, the obligations of each party, the existing franchise network and the Franchisor’s business philosophy. It can include items from accounting considerations such as VAT to types of stationery, outlet format and advertising restrictions.
The Franchisor should also consider any intellectual property rights and ideally protect these at the outset of the franchise.
I registered the client’s trade mark with the Intellectual Property Office prior to the commencement of the franchise.
I drafted a Franchise Agreement to govern the relationship between the parties. This Agreement contained provisions including:
- the fees which are to be paid;
- the term of the arrangement;
- the premises which the Franchisee will use and how these premises are to be occupied;
- termination of the Franchise Agreement.
Response to a claim in the Employment Tribunal
Our client had received a claim from a former employee who was claiming unfair dismissal. In order to defend this claim our client, the respondent, had to present its response by using the Employment Tribunal’s response form ET3.
I had to gather the evidence from the client relating to the events leading up to and resulting in the former employees’ dismissal and establish the strengths and weaknesses of the case. I then assisted with the drafting of the ET3 response form incorporating the evidence, ensuring the Employment Tribunal’s requirements were included and submitting the form to the Employment Tribunal. This tested my research, drafting and communication skills.
This is just a small glimpse into some of the matters I have been involved in over the last couple of weeks in the Company Commercial department. If you are interested in any area of commercial or employment law then I can assure you that this seat will be very dynamic and provide a good insight into the world of business.