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Becoming a company director for the first time is an exciting step, but one that must be taken with caution.

Directors carry a heavy responsibility – running a company involves key decision-making that must take into account the long-term consequences of decisions, the interests of employees, the interests of the shareholders, the company’s relationships with its suppliers and customers, and the impact of decisions on the community and the environment.

With corporate social responsibility becoming increasingly important, directors often have to balance what may be conflicting factors in making a decision, such as an environmental consideration that is at odds with shareholders’ interests.

Here’s what you need to know about the role of a company director and what your legal duties are towards the company.

What is a company director?

The director/s run the company on behalf of the shareholders and have a number of legal duties towards the company.

All private limited companies must have at least one director.

The role of the director is defined by case law and confirmed by the Companies Act 2006.

Effectively, a director should always act in good faith and in the interests of the company as a whole by declaring any conflicts of interest and not making personal profits at the expense of the company.

Apart from making business decisions, the directors are responsible for preparing and delivering documents on behalf of the company to Companies House and HM Revenue & Customs (HMRC), such as the company’s accounts and the annual return.

Directors’ duties

Since directors have the power to take important business decisions on behalf of the companies they control, they have duties imposed on them to protect the interest of these companies.

The directors’ duties are designed to ensure that the company comes first. Directors must act in the interests of the company and not in the interests of any other party, including shareholders.

The Companies Act 2006 codifies the seven duties of a director:

1. Promote the success of the company: ‘Success’ is not defined in the Act, but Government guidance suggests that for a commercial company, success would be a long-term increase in value.
2. Avoid conflicts of interest: This duty makes it easier for a director to enter into a transaction with third parties by allowing directors who are not subject to any conflict to authorise the transaction, provided that certain requirements are met.
3. Act within powers: A director must only act in accordance with their powers, which normally originate from the company’s constitution, i.e. its memorandum and articles of association.
4. Do not accept benefits from third parties: This means a director cannot accept a benefit from a third party that arises because they are a director or because they take, or do not take, a particular action as a director.
5. Exercise independent judgement: This duty is not infringed if a director acts in accordance with an agreement entered into by the company or in a way that is authorised by the company’s constitution.
6. Declare an interest in a proposed transaction or arrangement: When a director has a direct or indirect interest in a proposed transaction, they must disclose the nature and the extent of this interest to the board, before the company enters into the transaction.
7. Exercise reasonable care, skill and diligence: Directors must exercise reasonable care, skill and diligence using the general knowledge, skill and experience reasonably expected of a person carrying out a director’s functions (the “objective” standard) and their own general knowledge, skill experience (the “subjective” standard). The effect of the subjective test is that a director who has more experience, knowledge and skill must use a level of diligence in carrying out their duties that reflects their more advanced expertise.

Who can be a director?

A director must be 16 or over and not be disqualified from being a director. Directors do not have to live in the UK, but companies must have a UK registered office address.

At Palmers, our company and commercial solicitors can help you understand your duties as director, and ensure you remain compliant with the law.

For help with all aspects of company governance, contact our company and commercial law specialists today for expert advice.

Very few people go into business expecting things to go wrong.

However, sometimes life gets in the way and business partners fall out or personal circumstances change. What happens then in the context of a company?

The absence of an agreement between shareholders often results in costly disputes over what rights each person has and how the company is run, valued or funded.

Failure to document arrangements properly can hamper growth, and problems can arise if one party wants to exit the company or on the death of a shareholder.

A shareholders’ agreement provides clarity and peace of mind to all shareholders about what can and cannot be done and what happens when things go wrong.

What is a shareholders’ agreement?

A shareholders’ agreement is exactly that – an agreement between the shareholders of a company.

It sets out the relationship between the shareholders, how the business will be run and what happens if difficulties arise.

Shareholders’ agreements supplement the Articles of Association.

Unlike the Articles of Association which are governed by corporate law, they are governed by contract law and may be amended and ended by simple agreement. Also, unlike the Articles of Association, the shareholders’ agreement is a private document, so does not need to be registered with Companies House or made public.

Why should you have a shareholders’ agreement?

Shareholder deadlock (particularly if accompanied by director deadlock) can paralyse a business.

How shareholder disputes and deadlocks are dealt with can often be resolved and negotiated by careful review and consideration of the Company’s Articles of Association or a written shareholders’ agreement, provided that (i) the Articles have properly been considered and drafted at the start of the relationship and (ii) a shareholders’ agreement exists.

A well-drafted shareholders’ agreement can set out strategies to help resolve shareholder deadlock or deal with the issues that arise when a shareholder decides to sell their interest in the business.

When there is no shareholders’ agreement, contentious scenarios are more likely to arise.

Additionally, there are many situations where the shareholders will not be happy with the standard voting rights in accordance with shareholdings.

For example, a company may be reliant on the skills and knowledge of a minority shareholder, or that shareholder may have lent money to the company.

A shareholders’ agreement provides a more equal distribution of power and protects minority shareholders.

What should be contained in a shareholders’ agreement?

A shareholders’ agreement sets out detailed and practical rules for the company and its shareholders, and should cover:

• Purpose of the company: What is the company’s business plan and what are the expectations of the shareholders?
• Matters requiring unanimous consent: A shareholders’ agreement should explain clearly which decisions can only be made with unanimous consent and in which matters minority shareholders will have veto rights.
• Shares: What are the terms regarding the distribution of any new shares? Consider also what will happen if a shareholder dies, sells their shares or becomes incapacitated.
• Directors: Decide who can appoint and remove directors to the company, as well as which rights of management are delegated to the directors.
• Finance: Set out how the company will be funded and whether there will be an allotment of new shares to raise capital.
• Exit strategies: It is important to outline what provisions will be made when a shareholder wishes to exit, such as whether existing shareholders will have first right of refusal on the shares.
• Dispute resolution: How will disputes be resolved? Will a third party be appointed to arbitrate? Make sure you have clear strategies in place to help to minimise animosity during a dispute.
• Defining the power of shareholders: To what level can individual shareholders act on behalf of the company without consultation and agreement? How can shareholders be prevented from competing with the company and poaching clients or staff?

An understanding of the statutory provisions, the common law provisions and the company’s Articles are all required when drafting such an agreement, along with a clear understanding of the common issues that could arise within the company and the range of possible solutions that could be included.

Prepare for future disputes with a shareholders’ agreement

Disputes internally within a business can be challenging and even have the potential to destroy a good business if not properly dealt with.

At Palmers, we can advise you on how your company might benefit from a shareholders’ agreement and can draft an agreement appropriate to the needs of your company.

If a dispute arises, we can help you implement the dispute resolution strategies laid out in the shareholders’ agreement, ensuring you can resolve matters amicably and get back to running your business.

A shareholders’ agreement is essential for managing future business disputes and protecting the value of your business interests.

For tailored advice on shareholders’ agreements and dispute resolution, contact our company and commercial law specialists today.

Preparing for the arrival of a new child is an exciting time – and at Palmers, we know that you will be keen to spend quality time with the newest member of your family.

However, understanding legislation around paternity leave can be difficult.

Here’s what you need to know about your paternity leave rights as a father-to-be.

Am I eligible for paternity leave?

You can potentially receive paternity leave if you are one of the following:

• The child’s biological father.

• The spouse, civil partner or partner of the mother (or adopter).

• The child’s adopter.

• A parental order parent if you are having a baby via a surrogacy arrangement.

However, there can be gaps in eligibility in some cases, so you should always speak to an employment law expert for advice.

To be eligible for statutory paternity leave, you must:

• Be classed as an employee.

• Provide the correct notice.

• Be taking time off to look after their child or the mother/other parent.
• Not have already taken shared parental leave in respect of the same child.

• Have the required degree of responsibility for the child’s upbringing.

• Have been employed by your place of work for at least 26 weeks at any point during the qualifying week.

• Remain with the same employer or an associated employer until the baby is born/placed for adoption (as applicable).

If your baby is born early, the qualifying week is still based on the baby’s due date.

The qualifying week is the 15^th week before the baby is due unless the employee is adopting the child. If you are adopting from within the country, the qualifying week will be the week in which the employee is notified that they have been matched with a child.

What statutory paternity leave can I receive?

You can choose to take two weeks period of paternity leave or two one-week periods of paternity leave.

This amount is the same even if you have more than one child, such as twins.

Unless there is a change of circumstances, the start date must be one of the following:

• The actual date of birth/placement.

• A specified number of days after the birth/placement.

• A set date which is after the expected date of birth/expected week of placement.

Paternity leave must usually be taken within 52 weeks of the child’s birth, placement, but there are cases where this period can be shorter.

What notice must I give?

Notice must be given before the qualifying week, or as soon as reasonably practicable if this deadline cannot be met. Your employer may request that you give notice in writing.

Your notice should contain a declaration that you meet the eligibility requirements for paternity leave and confirm that you expect to have responsibility for the child’s upbringing.

The effects of taking paternity leave

During paternity leave, you are entitled to benefit from your usual contractual terms except for those terms relating to remuneration

After paternity leave, usually, but not always, you have a right to return to the same job that you were employed to do immediately prior to taking the leave

You should not be subjected to detriment or dismissed because they have taken or sought to take paternity leave.

What pay am I entitled to?

Subject to your being on payroll earning at least £125 per week in an eight-week period ending with the qualifying week, whilst on paternity leave you will be entitled to Statutory Paternity Pay (SPP) at either £187.18 per week or 90 per cent of your average weekly earnings, whichever is lower.

Your employer may choose to pay you a rate above SPP.

Antenatal/Adoption Appointments

You are entitled to unpaid leave before your baby is born if you are accompanying a pregnant person to antenatal appointments. This is allowed if you are:

• The father.

• The expectant mother’s spouse or civil partner.

• In a long-term relationship with the expectant mother.

• The intended parent if you are having a baby via a surrogacy arrangement.

Similarly, there is also entitlement to time off to attend certain adoption appointments.

You may also qualify for Shared Parental Leave. This can not only extend the amount of time you are eligible to take off work, but the paid leave you are entitled to as well.

Additionally, your employer may offer you a more generous package of parental leave and pay.

What if I lose my baby?

You can still get Paternity Leave and/or Pay if your baby is:

• Stillborn from 24 weeks of pregnancy.

• Dies after having been born alive at any point during the pregnancy.

You can take any leave you booked before losing the baby. If you have any un-booked paternity leave remaining, you can book it and take it within 8 weeks of the death.

You may also be eligible for Statutory Parental Bereavement Pay and Leave.

Other leave you may be entitled to

You may also be entitled to up to 18 weeks’ unpaid Parental Leave per child until they reach the age of 18 (a maximum of 4 weeks per child in any one year)

Other leave you may be eligible for include:

• Neonatal Care Leave and Pay – This applies if your baby needs specialist neonatal care after birth.
• Dependents Leave – This is reasonable unpaid time off work to deal with certain unexpected family emergencies, e.g. to arrange care for a dependent or to deal with an unexpected childcare breakdown.
• Carers’ Leave – You may take one week’s unpaid leave per annum to provide or arrange care for a dependent with longer term care needs due to an illness or disability.

Understanding and taking Paternity Leave

If you are unsure about your statutory rights or your employer’s family leave policies, it is best to talk to a legal expert.

We can ensure that you receive the leave, pay, and benefits you are entitled to – leaving you free to focus on crucial bonding time with your newborn.

For further guidance on paternity leave, get in touch with a member of our team today.

In recent years there has been a significant increase in legal claims issued by disappointed beneficiaries, seeking to challenge the validity of a family member’s Will after they have died (this area of law is known as ‘Contentious Probate’).

These challenges often come about because someone has been left out of a Will or not received the inheritance they were expecting.

It may be the case that the Will was made in circumstances where the Testator was suffering from a mental illness or was subject to control or influence by a third party.

In these circumstances it is possible to seek to have the Will set aside and a previous Will admitted to Probate (if one exists, failing which the estate will be administered on the basis that the Deceased died intestate).

Here’s what you need to know about contesting a Will.

On what grounds might a Will be contested?

A Will can be contested on a number of grounds, including:

• Lack of capacity: This is when the person making the Will (testator) isn’t able to understand the implications of the Will due to an impairment or disturbance of the mind (for example due to dementia).
• Lack of formalities: If a Will has not been signed by witnesses or in the presence of witnesses, it may be invalid.
• Lack of knowledge and approval: If the testator is believed to have been unaware of (or not understood) the content of the Will, this could be grounds for contesting the Will.
• Undue influence: This refers to malign influence on the testator to the extent that they were not acting of their own free will or were afraid of acting on the contrary.
• Fraudulent Calumny: When a person has made false misrepresentations to a testator which “poisons their mind” against another so that they are excluded from the Will.

One of the most serious grounds on which a Will might be contested is forgery.

Forgery

A forged Will might be one that has knowingly not been created according to the legal procedure, or an earlier Will that is put forward after the latest version has been hidden or destroyed.

In rarer cases, a Will may even have been forged completely in a way that vastly differs from the deceased’s wishes.

It can be difficulty to identify if a Will has been forged.

However, some tell-tale signs include:

• Out-of-character terms.
• A signature that is markedly different from the deceased’s usual handwriting.
• The Will being found unexpectedly by someone who stands to benefit.

If you think someone has forged a Will, it is vital to speak to a solicitor as soon as possible.

How to contest a Will

If you believe that a loved one’s Will is not an accurate reflection of their wishes, you may wish to challenge the Will.

It is recommended that you do this through an experienced solicitor, who can assess your position and identify the most suitable grounds for your claim.

A solicitor will also advise on gathering evidence to support your claim and challenging presumptions usually made by other parties, such as whether the testator had capacity to make their Will.

Although there is no statutory time limit for challenging the validity of a testator’s Will, it is important to act swiftly to avoid the estate being administered and assets being disposed of before you can contest.

Contentious Probate services with Palmers Solicitors

At Palmers, we understand that losing a loved one is an extremely difficult time. We also understand that this can be exacerbated if you feel the need to dispute the Will.

We know that Contentious Probate matters are of high emotional, financial, and sentimental importance to people, particularly where there are competing views as to the Deceased’s wishes and where high-value inheritances are at stake.

Our expert team has extensive experience in all aspects of contentious probate and can ensure that you receive clear, decisive advice.

We also offer mediation services to help you resolve disputes in a more timely, cost-effective and amicable manner.

Our expert contentious probate team include ACTAPS accredited members, meaning they possess a high level of expertise and experience in dealing with contentious trusts and probate disputes.

If you believe that a relative’s Will may be invalid, it is essential to seek legal advice as soon as possible. Contact us today for more information.

You’ve probably heard of Lasting Powers of Attorney (LPAs), which enable you to appoint others to look after your financial and property affairs should you lose capacity.

However, LPAs are not the only way of granting authority for someone else to manage your affairs.

Here’s what you need to know about Ordinary Powers of Attorney.

What are Ordinary Powers of Attorney?

Ordinary Powers of Attorney (OPAs) are temporary legal documents that enable you to grant authority to one or more people – “the Attorneys” – to look after and manage your affairs.

There are two types of OPA: General and Specific.

• A General Power of Attorney gives your Attorney broad authority to manage all your financial affairs. This can be helpful if you are travelling for an extended period, undergoing medical treatment, or simply want someone to assist you temporarily with day-to-day financial tasks.
• A Specific Power of Attorney is limited to particular tasks or transactions, such as selling a property or managing a specific bank account on your behalf.

Depending on your circumstances, either option could be suitable. We can help you determine the right fit.

What conditions are required for an Ordinary Power of Attorney?

It’s important not to view it as a substitute for an LPA. An OPA only operates while you have mental capacity. Once that is lost, the OPA immediately ceases to be valid.

An LPA provides much wider protection and is designed to remain effective if you lose capacity. For most people, putting both types of documents in place is a sensible part of long-term planning.

It’s also worth noting that an OPA does not take away your ability to act on your own behalf. It runs in parallel, meaning you retain full control and decision-making authority for as long as you are able.

You’ll decide who will act as your Attorney(s) and you can cancel OPA at any time.

How does an OPA differ from an LPA?

Rather than conferring a general power, an OPA can limit the Attorney(s) to very specific acts.

For example, you may use an OPA to allow someone to sell a property on your behalf.

At the end of the OPA’s time period, or at the conclusion of a particular transaction, the OPA ceases, and the Attorney(s) will have no further power to act on your behalf.

Manage your affairs with Palmers Law

An OPA is a very useful way of appointing someone to help manage your financial affairs on a temporary basis.

However, it is important that you understand fully the implications of an OPA and how to ensure clarity on what your Attorneys can and cannot do.

Independent legal advice is vital for protecting your interests and making sure an OPA is right for you.

For more information about Ordinary Powers of Attorney, get in touch with our expert team today.

The number of couples divorcing later on in life – often known as “grey divorce” – has increased over the past few years.

While divorce can be a challenging process at the best of times, there are added legal difficulties for older couples.

If you’re thinking about separation later in life, here’s what you need to consider.

Why are more people divorcing later in life?

The introduction of “no fault divorce” in 2022 has made it much easier to get a divorce, particularly for couples who plan to split amicably.

Couples no longer need to provide a reason for divorce, and individuals are no longer able to contest a divorce, making it much easier for people to detach themselves from partners who are reluctant to split.

In short, the introduction of “no fault divorce” has removed barriers that may have previously prevented couples from separating.

Shifting societal attitudes towards divorce and older-age relationships is another factor contributing to the increase of grey divorces. Those who may not have wanted to risk social ire may now feel freer to divorce with the burden of social stigma lifted.

Additionally, divorce is now more viable for older women in particular, who are now more likely to enjoy financial independence.

What are the added legal complexities of divorcing later in life?

Divorce has become a much more accessible option for older couples, both practically and socially.

However, divorcing at an older age still adds legal challenges less likely to be faced by younger couples.

• Greater assets accumulated: Older couples are likely to have accumulated more assets than younger couples. This makes dividing up assets more complex, particularly if only one partner holds the majority of the asset value.
• Pensions: Older couples may be nearing retirement or already retired. Therefore, a divorce will require arrangements to be made regarding pension funds, such as pension sharing or lump-sum settlements.
• Wills and estate planning: Divorce and its accompanying financial arrangements will likely mean significant revisions to the couples’ Wills and estate plans.
• Care needs: With average lifespans increasing, it is important to think about how you will fund any future care provision and how you can secure the necessary finances in your divorce settlement.

In addition to such legal and financial considerations, family dynamics can be another difficulty for older divorcing couples.

Older couples may be worried about how to manage relationships with children, in-laws, and grandchildren, particularly if they are concerned about whole family occasions.

Supportive divorce services with Palmers Solicitors

Whether you are filing for divorce individually or jointly, it is strongly recommended that both partners seek independent legal advice.

Even the most amicable separation can come with its challenges, so independent legal representation is vital for protecting your interests.

An experienced family solicitor can help you understand your options, advise on financial arrangements, and explore amicable methods of conflict resolution (such as mediation) to reduce legal costs.

At Palmers, our highly experienced family law team are here to help with your divorce.

Our Fixed Price Divorce Package provides a “no fuss” solution to give you peace of mind at a stressful time.

You will receive a professional, efficient and cost-effective service, with all steps covered from initial instructions through to Final Orders.

If going to court becomes necessary, we will represent you and negotiate for a settlement that best meets your needs.

For tailored advice and guidance on divorcing later in life, contact our Family Law team today.