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There are a number of reasons why you might want to buy back your company’s own shares.

You may wish to buy out shareholders looking to exit the business, wish to return surplus cash to shareholders, or improve earnings per share ratio.

However, as with any transaction, there are a number of factors you need to consider before moving forward.

Things to consider before buying back your company’s shares

A key element to consider before buying back your company’s shares is whether the transaction is permitted in the Articles of Association.

If the articles contain a restriction or prohibition against buybacks, your purchase will not be permitted. There must also be express permission in the articles if you intend to use the de minimis exemption.

You will also need to comply with (or, alternatively, waive) any pre-emption rights in the company’s articles or any shareholders agreement. Otherwise, pre-emption rights can be amended or removed prior to the buyback taking place.

As a minimum, the share buyback contract should set out the main terms of the transaction, including the name of the selling shareholder(s), the number/class of shares being sold, and the price to be paid.

Additionally, your company can only buy back shares that are fully paid. At least one non-redeemable share must remain in issue after the buyback has taken place.

Other factors you need to consider include:

• Approval:A share buyback must be approved by the company’s members, either by written resolution or a resolution in a general meeting. A member holding the shares being acquired is not an eligible and cannot vote on the resolution relating to their share buyback.
• Payment: Statute requires any shares bought by a company as part of a share buyback to be paid for at the time they are purchased. This principle of “cash on completion” means that it is not possible for the payment to be deferred or paid in instalments.
• Multiple buybacks: If you can’t pay for the shares in one go on completion, then it is possible for a buyback contract to provide for a number of buybacks in stages or tranches. If the buyback is funded out of distributable profits, then the company must have sufficient distributable profits to pay for each individual tranche of shares at the time of each buyback.

Cancel shares or hold in treasury?

Shares that are the subject of a buyback can be cancelled or held in treasury.

Treasury is a “share storage” where the shares are held by the company itself (the company needs to be registered as the holder of the treasury shares).

Those shares can be transferred or sold by the company at a later date rather than being cancelled. Holding shares in treasury is only possible if the buyback has been done out of distributable profits.

The company holds the treasury shares but cannot exercise voting rights and is not entitled to any dividends or capital distributions, if any are made by the company. Shares held in treasury can be cancelled at any time.

The company may transfer the treasury shares at any time for cash consideration unless the transfer is pursuant to an employee share scheme, in which case consideration is not required.

Any treasury shares sold this way are treated, for tax purposes, as if they were freshly issued shares and generally therefore don’t attract stamp duty on the initial resale.

Stamp duty treatment on the buyback is the same for shares held in treasury as it is with shares which are subsequently cancelled.

 Make sure you meet your statutory obligations

Following the buyback, you should attend to the payment of any relevant stamp duty, the relevant filings at Companies House, and the updating of the company’s statutory books, including any required changes to the PSC register (Persons with significant control).

Ensuring you comply with the statutory requirements of a buyback will allow you to move forward in the full knowledge that there is no comeback on the company or its directors and will enable you to draw a line under the process.

The last thing you want is to have to incur the time and expense of unravelling a void transaction!

At Palmers Solicitors, our Corporate and Commercial lawyers will make sure no stone is left unturned in your share buyback.

With a wealth of experience advising businesses just like yours, we can support you with all aspects of your commercial transactions.

For tailored advice and guidance on buying back your company’s shares, please get in touch.

In the past, it was not uncommon for a business to move straight to issuing legal proceedings whenever a dispute arose. This remains a viable and often the best solution in many cases.

However, there are now many alternatives to formal court proceedings which should be considered by any business involved in a commercial dispute because it is not a on size fits all issue.

Indeed in many instances issued legal proceedings and alternative dispute resolution mechanisms run side by side.

What are the alternatives to formal court proceedings?

Businesses are increasingly using alternative methods to resolve commercial disputes.

These methods are known as Alternative Dispute Resolution (ADR) and are encouraged by the court.

A party who unreasonably refuses to participate in ADR may be sanctioned by the court in future legal proceedings.

Negotiation

The most straightforward and flexible way to resolve a dispute is to approach the other side to explore the chances of a settlement.

This can be done at any time during the litigation process, even during a trial. It can be done before litigation and during it.

However, you should always take legal advice first to ensure the settlement discussions are conducted on a “without prejudice basis”. This means that anything said about the dispute during the settlement negotiations or in any written settlement offer cannot be used later at the trial.

This protection only applies to statements made purely in an attempt to settle the case.

Mediation

Mediation is by far the most frequently used method of ADR.

While mediation can take many forms, it most typically involves the parties participating in a meeting with a third-party neutral mediator, whose role it is to seek a settlement of the issues between the parties.

Mediators are trained in the practice of mediating disputes and often have high settlement success rates.

Whereas court proceedings can often only provide limited remedies, such as the payment of compensation, mediators can achieve more flexible and creative solutions like a discount on a future order, or the publishing of an apology.

Adjudication

Adjudication is typically used in the construction industry and is set out in most construction contracts.

It is similar to a court process whereby an expert in the field typically makes a decision based on evidence put in front of them.

Adjudication can be expensive, but it is usually conducted in a very short timescale so a decision can be reached quickly.

If your company is likely to be involved in a dispute, taking early legal advice could help save you time and money in the long run.

Dispute resolution with Palmers Solicitors

At Palmers, our specialist Dispute Resolution solicitors offer sensible, practical solutions and sound advice based on a wealth of experience.

We are leading advocates of mediation and other ADR procedures, and we will do our utmost to help you reach a settlement outside of court.

With our pragmatic, robust approach, we will work with you to achieve the best possible outcome in line with your commercial objectives.

For clear, cost-effective advice tailored to your unique situation, contact our Dispute Resolution team today. 

When a couple separate, there can sometimes be disputes over where the child will live or how much contact they should have with the other parent.

It can be highly distressing when your ex-partner prevents you from seeing your child. Not only will you feel the impact of a strained relationship, but your child is likely to as well.

Here’s what you can do to reestablish contact with your child.

Communicate first

Trying to communicate with your ex-partner about child arrangements is the first step – and you don’t have to do it alone.

A simple letter from a family solicitor can break the ice and set out your wishes to maintain contact with your children. Your solicitor can also advise you on your rights and the appropriateness of any conditions on the contact and initiate negotiations for change.

Alternatively, a mediator can provide a neutral setting for discussion with the parents and could be an opportunity to review the arrangements for seeing your child and overcome any obstacles.

You must attempt mediation prior to initiating court proceedings unless mediation wouldn’t be appropriate in those circumstances, for example domestic abuse.

Court application

If direct communication and mediation do not work, you may need to consider making a court application for a Child Arrangements Order.

A Child Arrangements Order is a court order that sets out who is responsible for the care of a child.

Anyone with Parental Responsibility can apply for a Child Arrangements Order. If you don’t have Parental Responsibility of the child, you’ll need to request permission from the court to make a separate application for Parental Responsibility.

When considering who the child should live with or how the child’s time shall be spent between the parents, the court will consider what is in the child’s best interest – and it is generally assumed that maintaining contact with both parents is in the child’s best interest, unless there are clear reasons otherwise.

A CAFCASS officer will be appointed to the case and they will spend time with the family in order to prepare reports and provide recommendations to the court.

The court will consider the wishes and feelings of the child, if they are mature enough, and what effect any change in circumstances may have on the child’s wellbeing. The Court will consider all of the circumstances of the individual case.

There may be a number of Court hearings the parents will be expected to attend to progress the matter towards a final Child Arrangements Order.

A final Child Arrangements Order should set out the following:

• With whom the child shall live.
• How often the child should spend time with the other parent.
• How and where this contact will take place.

For example, a child may spend weeknights with one parent and weekends with their other parent.

A Child Arrangements Order can also set out other types of contact, such as phone calls, video calls, emails, and letters.

The Order will stay in place until the child is 16, or in some exceptional cases, until 18. If you reconcile with your ex-partner and live with one another for a period of six months, then the Order will cease.

Most Orders include terms for the parents to agree to changes to the arrangements by agreement.

However, these are usually one-off arrangements; if you wish to make significant changes, then you will need to apply to the court to vary the Order.

What if my ex still won’t let me see my child?

The Child Arrangements Order is legally binding, and if a parent breaches it, they will be in contempt of court.

So, if you have a Child Arrangements Order in place and your ex-partner is still refusing to let you see your child, then you can file an application for an Enforcement Order.

A court can use an Enforcement Order to make your ex-partner comply with the terms of the Child Arrangements Order.

Your ex could also be required to attend parenting classes, pay a fine, provide compensation to you, or undertake unpaid community service or other sanctions.

Child arrangements support with Palmers Solicitors

Parents are usually the best people to decide upon arrangements for their children, and we recommend that issues relating to child contact be agreed between parents.

Unfortunately, following the breakdown of a relationship, it is often difficult for parents to agree on what is best for their children.

If you are a parent and you are concerned about arrangements with your child, you should seek specialist legal advice from an experienced family solicitor.

At Palmers, our family lawyers have a wealth of experience supporting parents with child arrangements after divorce or separation.

We’ll do everything we can to help you avoid going to court, including writing to your ex-partner or their solicitor on your behalf and referring you to an appropriate mediation service.

However, should Court proceedings become necessary, we’ll be there to represent and support you every step of the way.

If your ex is preventing you from seeing your child, contact our family law team today for urgent advice and guidance.

So, your loved one has passed away, and no one has been able to find a Will. What happens now?

Where there is no valid Will, the rules of intestacy apply. This makes the process of applying to administer the estate and distribute the assets more difficult than when a Will is in place.

What is intestacy?

The rules of intestacy in England and Wales govern how a person’s estate is distributed if they die without a valid Will.

If a person is said to have died “intestate,” this means that they have relinquished their control over their estate, and the law is the sole determiner for the distribution of their assets.

These rules only recognise spouses, civil partners and certain close family members.

Under these arrangements, the only people to automatically inherit are married or civil partners.

If they also have children and the estate is worth more than £322,000, then the first £322,000 and their personal possessions will go to their spouse or civil partner and the rest will be divided in half between the surviving spouse and children.

Unmarried couples are not entitled to inherit anything automatically, no matter how long they have been together or whether they share a home, assets or children.   Although note that property or bank accounts held as beneficial joint tenants will pass to the surviving co-owner outside the intestacy provisions.

The lack of entitlement for unmarried partners can lead to distressing and financially difficult outcomes, with surviving partners often needing to make legal claims just to access jointly lived-in property or their partner’s finances that were perhaps used to support both of them.

How to administer the estate when there’s no Will

You will first need to value the deceased’s estate, taking into account any debts that need to be paid and any gifts made within seven years of the person’s death.

You will also need to calculate the amount of Inheritance Tax (IHT) liable on the estate and ensure that the correct forms and payment are sent to HM Revenue & Customs (HMRC) on time.

The next step is where the process differs from applying for probate in the case of a valid Will.

When there is no Will, you will need to apply for a Grant of Administration instead of a Grant of Probate.

This must be done by the most “entitled” person – i.e., the deceased’s next of kin. This will be the spouse or civil partner of the deceased, followed by any children who are over the age of 18.

Sometimes, there may be disputes over who should apply for Grant of Administration – for example, between surviving children if there is no surviving spouse or civil partner.  More than one child can apply.  It is also worth noting that for most intestacies a lengthy paper application is required as the online process is not available when there is more than one entitled person.

Once a Grant of Administration has been provided, you will need to liquidate the estate.

This is the official term for turning assets such as property and possessions into cash, which can then be distributed to beneficiaries.

In the absence of a Will, the liquidated cash goes automatically to their next of kin – usually a surviving spouse or civil partner, and potentially any children.

If the deceased has left no surviving spouse or children, the estate will pass to the next person most closely related to the deceased.

Managing intestacy with Palmers Solicitors

In an ideal world, everyone would leave behind a valid Will. However, life doesn’t always go to plan, and many people die intestate.

Our team are here to guide you through the complex process of intestacy.

Our experienced Wills, Trusts and Probate solicitors can take care of the whole process on your behalf, from applying for a Grant of Administration to making sure the estate is correctly distributed according to the legislation.

We offer fixed fees for cases where we are simply asked to assist with the application for the Grant.

If you require more extensive assistance, we’ll discuss the costs with you at a no-obligation meeting and can include fixed fees or an estimate range in our fee structures where appropriate.

If someone has died without a Will, it is important to seek legal advice as soon as possible. Contact our Wills, Trusts and Probate team today for compassionate guidance and support.

The period following a divorce or dissolution of a civil partnership can be fraught with uncertainties, particularly concerning your financial obligations, such as spousal maintenance.

The legal considerations surrounding spousal maintenance are complex, meaning that many divorcing couples are unclear about their obligations or entitlements post-separation.

What is spousal maintenance?

Spousal maintenance is financial support provided by one ex-partner to another after a divorce or dissolution of a civil partnership, aimed at helping the lower-earning or non-earning party adjust to new financial circumstances.

It varies from temporary support during legal proceedings to long-term post-divorce maintenance.

Eligibility depends on factors such as marriage length, financial needs, and earning capacities, with courts aiming for a fair resolution.

Key considerations for determining maintenance include:

• The standard of living during the marriage or partnership.
• Each party’s income, earning capacity, and financial resources.
• The financial needs and responsibilities of both parties.

The Court often aims for a “clean break” to encourage financial independence but may grant maintenance for a fixed period or indefinitely, based on age, presence of minor children, and time spent out of work for child-rearing.

Modifying spousal maintenance

Spousal maintenance is not set in stone and can be modified or terminated under certain conditions.

Significant changes in circumstances, such as a substantial increase or decrease in either party’s income, may warrant a review.

Parties seeking to alter maintenance terms must apply to the Court for a variation order.

What happens if one party fails to pay spousal maintenance?

If one party fails to pay spousal maintenance, the Court can enforce payment through measures like garnishing wages, seizing assets, or issuing an attachment of earnings order.

They may also place a charge against the debtor’s property.

Those facing genuine financial difficulties should seek to vary the maintenance order by demonstrating a change in circumstances, possibly leading to reduced payments or a temporary pause.

Consulting a family law solicitor is crucial for anyone struggling with maintenance payments as failure to comply can result in financial penalties and, in severe cases, imprisonment.

Spousal maintenance versus lump sum settlements

Choosing between spousal maintenance and a lump sum settlement often involves a detailed analysis of both parties’ current and future financial situations.

A lump sum settlement may be particularly attractive to those seeking closure and a desire to avoid future disputes related to payment amounts or durations.

However, it requires careful consideration of the recipient’s ability to manage and invest the lump sum wisely to provide for their future needs.

This is especially relevant where long-term financial security is a concern, and the recipient may not have the earning capacity to replenish spent funds.

Moreover, determining the appropriate amount for a lump sum settlement involves complex calculations that consider the present value of future maintenance payments, the life expectancy of both parties and potential changes in circumstances.

Remarriage and cohabitation

Remarriage of the recipient ends spousal maintenance, as the financial support role shifts to the new spouse, cancelling the former partner’s payment duties.

Cohabitation, however, does not automatically stop maintenance payments but may trigger a review to adjust terms based on the financial benefits of the new living situation.

Courts examine the cohabitation’s impact on the recipient’s finances, potentially modifying maintenance to align with the recipient’s current needs and the financial support provided by the cohabiting partner.

What is the best way to handle spousal maintenance?

Engaging a solicitor to help you manage your spousal maintenance obligations is usually the best approach.

Our expert family lawyers can offer invaluable guidance on understanding your legal rights and obligations, ensuring that any agreement or court order is fair and reflective of your circumstances.

We can also assist in negotiating maintenance payments, applying for variations in the maintenance order in light of changed circumstances, and representing your interests in court, if necessary.

Together, we’ll help you to achieve a resolution that safeguards your financial stability.

Don’t let spousal maintenance make you uneasy. Contact our family law team today for expert advice and guidance.

Did you know that nearly five billion people share their lives online?

From treasured photos and messages on social media to important documents and financial records, your digital presence forms a vital part of your life story.

Despite this, digital assets are still often overlooked in estate planning.

Without a digital estate plan, your loved ones may not be able to access or manage your online accounts and important digital assets.

That’s why we’ve launched our new Guide to Securing Your Online Life to help you find out more about our digital estate planning services.

Here’s what you need to know about digital estate planning and how you can implement it into your larger estate plan.

What is digital estate planning?

Digital estate planning, or digital asset management, sets out the digital assets you own and how you would like them to be distributed upon your death.

Unlike liquid assets, the monetary value of digital assets is not always immediately apparent.

Not all digital assets hold monetary value, but they may hold sentimental value.

The challenges of digital estate planning

Digital assets and the issues surrounding them are evolving faster than legislation. This means that there are several challenges involved with digital estate planning.

Digital assets are not currently defined in English law. Theoretically, they should be treated like any other form of property. However, there are key notable differences.

Unlike traditional assets, there is often no physical documentation that proves the deceased’s ownership of digital assets, therefore, it becomes necessary to access the deceased’s online accounts.

While physical assets such as properties or bank accounts are usually easily accessible to Executors, this is not always the case with digital assets.

Furthermore, under the Computer Misuse Act 1990, it is a criminal offence for anyone to gain unauthorised access to any computer device, including using another person’s password without their permission.

This can make accessing and distributing digital assets very difficult for Executors.

Although the Digital Devices (Access for Next of Kin) Bill was proposed in 2022 to grant a right of access to the digital devices of a deceased person to their next of kin, it only reached a second reading before the 2021-2022 session of Parliament was prorogued. At present, the Bill will make no further progress.

This is why it is important to consider how you wish to distribute your digital assets and how you will enable your intended beneficiaries to access them legally.

What you can do to prepare

Your first step should be to prepare an inventory of your digital assets, including relevant terms and conditions (such as deleting or preserving social media accounts) and any passwords needed to access these assets.

These should be stored an online encrypted and secure digital vault that can only be accessed by an appointed Executor upon presentation of your death certificate.

As a client of Palmers Solicitors, you have access to Zenplans, a digital estate vault that helps you securely organise all aspects of your digital life.

You can also utilise pre-planning tools, such as setting up Legacy Contacts, to help you manage your accounts after your death.

You must also make it clear in your Will that your Executor(s) are authorised to access your digital assets after your death. This will help to prevent them from falling foul of the Computer Misuse Act.

Secure your digital legacy with Palmers Solicitors

Digital estate planning is an essential part of your preparations for how your legacy will be managed after your death.

At Palmers Solicitors, we can help you keep up to date with the latest regulatory developments in digital estate planning and ensure that your overall estate plan includes your digital assets.

Our new resource, Your Digital Legacy: A Guide to Securing Your Online Life, explains how you can use Zenplans and pre-planning tools to ensure your digital legacy is left in safe hands.

Take control of your digital legacy today, get peace of mind and clarity tomorrow.

Secure your digital legacy today with Palmers. Download our guide to securing your online life.