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Archive for June, 2015

Tuesday 9 June 2015

MH Corporate

End of the corporate director… or not

Currently in the UK, companies are permitted to appoint directors who are corporate entities rather than individuals/natural persons. However, under the Companies Act 2006 all companies must have at least one director who is a natural person at all times.

Only just over one per cent. of UK companies use corporate directors. There are several reasons why it may be attractive or beneficial for companies to appoint corporate directors, such as administrative flexibility and efficiency. A corporate director could remain constant without the need to effect frequent appointments and resignations of individual directors. A parent company may also wish to directly control how its subsidiaries are run and may do so by it, or another group company, being appointed as a director of the subsidiaries.

How the courts will calculate business interruption losses

The case of Sugar Hut Group & Others v A J Insurance [2014] EWHC 3775 (Comm) considered the measure of business interruption losses to which the claimants were entitled following a serious fire at a well-known nightclub – the Sugar Hut Club in Brentwood, Essex (the “Club”). The case highlights the importance of full disclosure before inception of an insurance policy and gives an indication of how the courts will calculate business interruption losses and in particular the proper assessment of the overall loss of turnover.

The Facts

Following a fire on 13 September 2009, the Club was effectively unusable for a period of some 49 weeks until it eventually reopened on 25 August 2010. Very shortly after the Club reopened, it started to feature in a well-known TV show – The Only Way is Essex which significantly increased its national profile.  The Court referred to this as the ‘TOWIE’ effect.

Amendments to the Share Buyback regime: encouraging employee ownership

The Department for Business, Innovation & Skills has published new regulations amending the share buyback process under the Companies Act 2006, in an attempt to clarify the previous amendments of 2013. With these latest changes having come into force with effect from 6 April 2015, we take a look at the regime’s evolution over recent years and the likely effects of the changes.

Tuesday 9 June 2015

MH Dispute Resolution

Are you being served? (Again)

The recent decision of the High Court in Dunbar Assets v BCP Premier Ltd [2015] EWHC 10 (Ch) once again highlights the need to ensure that proceedings are served in accordance with the Civil Procedure Rules (“CPR”).

The Claimant was a banking institution providing lending to organisations and individuals looking for investment for developments. The Defendant was a construction management company which provided advice on proposed lending opportunities.

Tuesday 9 June 2015

MH International

Marriott Harrison continues to increase its international offering, focusing on key jurisdictions across its departments.

Below are some recent examples of the firm’s international work.

Tuesday 9 June 2015

MH Update Spring 2015

Welcome

Thank you for taking a few minutes to look at this edition of the MH Update.

It has been interesting raking over the embers of the general election and some of its statistics. The Conservatives had 36.9% of the vote so on a 66% turnout their majority was secured with about 24% of the available votes. This is more or less the normal situation under our system. The real shock of course was the imbalance when the number of votes against the number of seats is calculated. It took an average of 40,000 votes for each Labour MP, 34,000 votes for each Conservative MP, 25,000 for each SNP MP, 300,000 for each Liberal Democrat MP, 1,150,000 for the one Green MP and what must surely be an unprecedented 3,800,000 for the one UKIP MP.

Taken together, the Lib Dems, Greens and UKIP won 24% of the votes and between them they have just 10 MPs out of a total of 650 which is about 1.5%. The SNP had 4.7% of the votes which won them 56 MPs which is about 8%: so five times more MPs for about a fifth of the number of votes. Traditionally of course the government of the day is not much inclined to change the system which put it there.

Today the headlines have moved on. “For too long, we have been a passively tolerant society, saying to our citizens ‘as long as you obey the law, we will leave you alone’.” It is a measure of the interest in the political process that the election has generated, that this statement from Mr Cameron has been much bewailed and, in my hearing at least, by two well informed teenage voters.

Their interest is as welcome as it is well directed as this raises an important question of what it is legitimate for the law to encompass. Will the so-called ‘snoopers’ charter’ now be passed, which the Lib Dems vetoed on the grounds of it being a violation of the right to free speech? If the beneficiaries of our excessive tolerance are ‘extremists’ how can such a notion be encapsulated in statutory language without potentially being much too imprecise? No doubt we will find out soon enough.

So some of the most basic elements of our legal system are in the spotlight: our constitution and the right to free speech and all this in the year when we celebrate the 800th anniversary of Magna Carta which set in motion the granting of some of our most fundamental rights. I have not been to the exhibition at the British Library yet but I gather it is fascinating and firmly intend to go. I found it hard to believe but apparently the display, as well as including copies of Magna Carta and the earliest English royal will, give us the opportunity to see two of King John’s very own teeth. No doubt these royal molars were subjected to much grinding and gnashing over the vexed subject of the Charter so are rather appropriate, if improbable, witnesses of the meeting at Runnymede.  It’s a chance not to be missed.

Sadly, I cannot close without mentioning that this is the first publication since Duncan Innes died in February. He was a partner in the firm for over 20 years and is much missed. A large contingent from the firm and many of his other friends, which included many whose friendship stems from his work, attended a lovely funeral for him. I understand that Vera intends to have a memorial service for Duncan but that will not be until the autumn. Details will be circulated and included on the firm’s website nearer the time. It is not all sadness, however, and it is all the more of a joy to announce the birth of Guy and Renate Hitchin’s baby Riley, Aideen Burke’s and Brian’s baby Alanna and Ben and Des Devons’ baby Constantino. Their news and the pictures of their beautiful children have been uplifting for us all and help us turn our attention to the future. I am sure you join everyone at Marriott Harrison in congratulating them and sending them our best wishes.

Jonathan Pearce

Tuesday 9 June 2015

MH Commercial and Media

Planned closure of the UK Patent Box to new entrants

The UK Patent Box enables companies to apply (subject to certain phasing-in rules) an effective 10% corporation tax rate to profits earned from its patented inventions. After initial announcements of a proposed tax break for intellectual property in 2009, the Patent Box finally came into effect on 1 April 2013. However, following a campaign led by Germany arguing that the UK scheme is unfairly competitive, the regime (which is still in its infancy) is already set on course to be transformed.

The Patent Box, in its current form, will be closed to companies that have not elected into it by June 2016, and will be closed altogether by June 2021. Companies could, therefore, still benefit from the tax break under the existing rules for a few more years, but must act swiftly if they have not yet elected into the scheme. Although a replacement scheme will likely be introduced, any new scheme will almost certainly have a narrower application.

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