You reap what you sow….

Taste your own terms before serving them up to consumers.

The latest guidance from the CMA, (the Competition and Markets Authority – who replaced the Office of Fair Trading) has advised businesses when dealing with consumers – not to use terms that the businesses wouldn’t like to sign up to themselves.

To see the short guide from the CMA click here.

A lot of the guidance from the CMA will sound familiar – for example that unfair terms and notices are not binding on consumers. A list of top tips is set out in the guidance as well as mention of certain terms that are considered “blacklisted” – to see the list click here.

The CMA has issued the guidance ahead of the Consumer Rights Act 2015 coming into force on 1 October 2015. This aim behind the 2015 Act is to consolidate much of the consumer law in the UK.

If your business deals with consumers and you’d like further advice on your terms of business or the effects of the 2015 Act, please get in touch.

Emma Arcari is an experienced corporate & commercial solicitor advising businesses on contract law, transactions, procurement & disputes.

Spring into action – Small Business, Enterprise and Employment Bill

The Government is out to do some overdue Spring cleaning with this Bill, with one stated, general aim being to increase transparency about who really owns companies. Though not law yet, the Bill is huge and it is on the way with broad cross-party consensus on many provisions. It affects many areas, so we will be drip feeding the impact in our newsletters and on our website.

Facilitate and rejuvenate receivables finance contracts? Invigorating invoice factoring?

In many ways, the most useful change under the Bill for hard-pressed and cash-strapped SMEs and very much the one to watch is the proposal in the Bill to allow the assignation of customer debts due to SMEs – even when the relevant customer contract prohibits such assignation without customer consent or at least intimation to customers. The effect could be enormous for those businesses who have shied away from assigning their customer debt book to their banks or invoice factors for fear of unsettling their customer base. In many ways this, at a stroke, could achieve what providing for statutory interest on the late payment of debts has failed to do in ongoing supplier-customer contracts and, if this proposal gets through, and it could yet be stymied or made useless by amendments which defeat its apparent benefits, it could have a massive effect on cashflows as there may no longer be a need to seek consent or even advise customers that such income streams have been assigned. As ever, though, the devil will be in the detail that emerges in any final enactment.

Are you a ‘spotless’ shadow director?

Though plenty of case law exists in relation to so-called shadow directors, the Bill now states that the general duties of directors expected by the Companies Act 2006 will apply to shadow directors. An exemption exists for advice given in a professional capacity, but those who run businesses though, or with regular advice and support from, family or friends should take care.

Time to clean out corporate directors?

The Bill proposes that all directors should be individuals, and the use of corporate directors (typically other limited companies) will be prohibited (with a few exceptions). So far, the Bill has set a provisional implementation date for the prohibition of October 2015. The exact exceptions to the rule are still being debated – watch this space. Companies will have 12 months from the provision coming into effect to appoint a natural director.

Nowhere to hide if you are a ‘person with significant control’ aka a PSC?

Companies will be required to obtain information about who owns (directly/indirectly) more than 25% of the shares or voting rights of the company; who has the ability to appoint the majority of the board; and who can exercise significant influence /control over a company. This information will then need to be kept in a public register (known as the PSC register) from January 2016. Criminal sanctions can be faced by the company and the PSC if there is a failure to comply with the new rules.

Emma Arcari is an experienced corporate and commercial solicitor with CCW Business Lawyers Limited  advising businesses on contract law, transactions and disputes across Edinburgh, Fife and Scotland.