In our previous blog ‘Business structures – the risks of getting it wrong – part two‘, we explored a range of structures you could use to set up your business. These included sole traders where you could be your own boss, receive the profits but be personally responsible for all the trade’s losses. We also discussed partnerships, where two or more partners can agree to share profits and losses and again be personally liable for all such losses.
Welcome to the first in a series of blogs prepared by BLM’s Commercial Litigation team that will take you through the life cycle of a company from the beginning until the end. Each blog will focus at a different stage such as forming a business and the different options available, making an impact in the business world to potentially getting ‘divorced’ in a partnership and parting ways. Our experts’ advice and knowledge will help guide you to understand and deal with litigation risks.
Whilst we live in a progressively technological world, where e-signatures, video calls and social media notifications are fully enshrined in daily activity, it is essential to remember that legal documents carry a solemnity and consequent requirements for formality that contain traps for the unwary. This was very much in evidence in the recent case of Katara Hospitality v Guez, which provides useful insights into deeds, powers of attorney (POA) and personal guarantees.
What is LIBOR?
The London Interbank Offered Rate is a benchmark interest rate that forms the basis of trillions of pounds’ worth of financial instruments across the world. It is derived from the interest rates at which banks are willing to lend money to each other and is calculated with reference to the pool of rates submitted daily by panel banks. However, the well-publicised rigging scandal that occurred following the 2008 financial crash has in-part contributed to the growing feeling of discontent with the current system and led to the head of the Financial Conduct Authority, Andrew Bailey, announcing in 2017 that LIBOR would be phased out and replaced in 2021. However, LIBOR is an ingrained reference point throughout the financial world and is not something that can be amended without consequence.
The acclaimed comedy film Shaun of the Dead featured Simon Pegg and Nick Frost trying to keep hordes of zombies at bay, as they infiltrated a leafy suburb. The humans sought refuge in a pub called The Winchester Tavern, where the final grisly showdown takes place.
In the business world, there is no shortage of zombies. Whilst there is no set definition, a regular symptom of such a business will be that is getting by through paying interest due on its debts, but not the underlying debts. Absent parental company or third party support, the business may only be surviving courtesy of the continuing low interest rates in the UK. Its viability in the future may therefore be questionable.
In the wake of the GDPR coming into force we have seen a heightened awareness of cyber risk. We are seeing the news carry stories around the latest high-profile “hack”, a word rarely mentioned in the business news until recently. Now, however, cybercrime has moved up the risk agenda of businesses all over the world, who could find themselves targeted by a malicious actor, every computing milli-second of every working day. It’s a term that covers a multitude of evils, from the compromise of customer data to bullying and harassment. This article focuses on cyberattacks that seek to damage or drain a business of financial or information assets.
In September 2018, we reported on the Crime (Overseas Production Order) Bill (“Bill”) – which was the UK’s attempt at expediting the cumbersome process that UK law enforcement agencies (“LEAs”) navigate when seeking to obtain data that is held overseas as part of a criminal investigation and/or prosecution. It was the case that in order to obtain overseas data, the only route available to gather such evidence would be via the Mutual Legal Assistance channel, which was seen as sluggish, and potentially riddled with red tape.