Call for new project ideas as Palace encourages entrepreneurial spirit

The Duke of York is encouraging people of all ages to come forward with new ideas, as part of a palace-backed project to help start-up businesses.

Prince Andrew has insisted that age is “no barrier” and has said that anyone who has spotted “a problem that needs to be solved” has the germ of a business idea, but many people are put off because they do not know how to take the next step.

The Duke’s Pitch@Palace events, which are now in their third year, allow entrepreneurs to pitch their ideas to investors and innovators and, more importantly, to meet mentors who can provide the benefit of experience.

He is encouraging individuals to apply for the next event, which takes place in November, the sixth in a series of get-togethers which have helped more than 400 start-up businesses so far, resulting in 447 jobs being created and more than £124million worth of turnover.

One of the success stories of Pitch@Palace is Jukedeck, a website that enables users to create their own music using artificial intelligence, without the need for composing skills, that can be used royalty-free on videos or other applications.

Cambridge University graduate, Ed Rex, founded the company last December, after winning a Pitch@Palace event and meeting such influential mentors as Wikipedia founder, Jimmy Wales, and subsequently raising £2million in investment.

In the first week after its launch, 100,000 pieces of music had been created on Jukedeck, and since then hundreds of thousands more have been added. Users can buy the music for a one-off fee.

The Duke has invited the Startup Britain national enterprise campaign to drive their touring double-decker bus into the quadrangle of Buckingham Palace. It will also visit 30 towns and cities over the summer, giving advice to would-be entrepreneurs and encouraging them to enter for Pitch@Palace where appropriate.

BJ Chong, a partner who specialises in company law, commented: “It is fantastic to see an official endorsement for projects aimed at encouraging entrepreneurs and new business start-ups. It can sometimes feel overwhelming to know how to take the germ of an idea and bring it to market so any scheme which helps smooth this path is to be welcomed.

“Good legal advice in the early days is also crucial and at Palmers we have helped countless new business start-ups – from sorting out company formation paperwork to providing intellectual property advice, so that their ‘brilliant idea’ is properly protected.”

For further information on all aspects of legal advice for entrepreneurs, new business start-ups and SMEs, please contact us.

Tata Steel has agreed the sale of its UK long products business to investment group, Greybull Capital, for £1 in a deal that aims to revive the British Steel brand and hopefully save 4,400 jobs.

The deal will keep open a steelworks in Scunthorpe, two mills in Teesside, an engineering workshop in Workington, a design consultancy in York and associated distribution facilities, as well as a mill in northern France.

Tata has been in talks with Greybull since late 2015 on the sale of its long products business.

Crucially, the agreement does not include the Port Talbot steelworks or the rest of Tata’s UK business, which employs around 15,000 staff, for which it is seeking a buyer after putting it up for sale last month.

The firm will be renamed British Steel, a brand which disappeared in 1999 with the creation of Corus, which was later bought by Tata.

Greybull will only pay a nominal fee for Tata’s Long Products Europe (LPE) division because it has agreed to take on the firm’s liabilities and put together a £400million funding package to keep the business going. A loan from the government on commercial terms could form part of this funding package.

Founded by former Lehman Brothers investment banker Nathaniel Meyohas, Greybull has previously invested in charter airline Monarch and high street electricals retailer Comet.

BJ Chong, a partner and head of Palmers Commercial and Company Law team, said: “Whilst the news for steelworkers in the North is largely good, the clock is ticking for Tata Steel. It is losing millions a week and investment deals can involve lengthy discussions; after all the deal with Greybull took six months to conclude.

“There have been suggestions of tentative interest from the steel company Liberty House but, according to reports, their plans require a radical and time consuming restructuring of operations at Port Talbot along with significant government support.

“Business Secretary, Sajid Javid, appears to have signalled the government’s willingness to co-invest with a buyer on commercial terms to secure a sale of Tata’s remaining assets. “Whilst this news gives hope to Port Talbot, it also shows just how difficult it may be to find a buyer.”

For help and support on all aspects of commercial and company law, please contact us.

The world’s media has focused on one major corporate finance story recently. A huge leak of documents has lifted the lid on how the rich and powerful use tax havens to hide their wealth.

The files were leaked from one of the world’s most secretive companies, a Panamanian law firm called Mossack Fonseca.

So what are the Panama Papers, just how big is the corruption uncovered so far and what are the implications for holding companies who are operating perfectly legally in foreign jurisdictions?

BJ Chong, a partner and corporate law specialist with Palmers explained: “The files show how many Mossack Fonseca clients were able to launder money, dodge sanctions and avoid tax.

“In one case, the company offered an American millionaire fake ownership records to hide money from the authorities. This is in direct breach of international regulations designed to stop money laundering and tax evasion.”

The Panama Papers represents the biggest leak in history, dwarfing the data released by the Wikileaks organisation in 2010. According to the BBC, who give an example of the scale of the data involved, if the amount of data released by Wikileaks was equivalent to the population of San Francisco, the amount of data released in the Panama Papers is the equivalent to that of India.

There are links to 12 current or former heads of state and government in the data, including dictators accused of looting their own countries.

More than 60 relatives and associates of heads of state and other politicians are also implicated.

The files also reveal a suspected billion-dollar money laundering ring involving close associates of Russia’s President, Vladimir Putin.

Also mentioned are the brother-in-law of China’s President Xi Jinping, Ukraine President Petro Poroshenko, Argentina President Mauricio Macri, the late father of UK Prime Minister David Cameron and three of the four children of Pakistan’s Prime Minister Nawaz Sharif. The documents show that Iceland’s Prime Minister, Sigmundur Gunnlaugsson, had an undeclared interest linked to his wife’s wealth. He has now resigned. The scandal also touches football’s world governing body, Fifa.

Part of the documents suggest that a key member of Fifa’s ethics committee, Uruguayan lawyer Juan Pedro Damiani, and his firm provided legal assistance for at least seven offshore companies linked to a former Fifa vice-president arrested last May as part of the US inquiry into football corruption.

The leak has also revealed that more than 500 banks, including their subsidiaries and branches, registered nearly 15,600 shell companies with Mossack Fonseca.

In all, the details of 214,000 entities, including companies, trusts and foundations, were leaked.

The information in the documents dates back to 1977, and goes up to December last year. Emails make up the largest type of document leaked, but images of contracts and passports were also released.

BJ Chong continued: “Using an offshore structure is not illegal in and of itself and there can be legitimate reasons for doing so, such as where well-known companies are assessing routes into new markets, mergers and acquisitions and legitimate estate or tax planning

“Some of the main allegations which follow the disclosure of the Panama Papers, centre on the creation of shell companies, that have the outward appearance of being legitimate businesses, but are just empty shells. They do nothing but manage money, while hiding who owns it.

“It is important to emphasise that shell companies are different to legitimate multiple holding companies which can be set up as a useful asset protection planning strategy and help to mitigate business risks.

“An ideal business structure often consists of an operating entity that does not own any vulnerable assets and a holding entity that actually owns the business’s assets. With this structure, the small business owner can eliminate, or at the very least substantially limit, liability for both business debts and personal debts.

“A multiple entity approach takes planning and expert advice to balance, amongst other things, funding through both equity and debt, using leases, loans and liens. With the ensuing Panama Papers scandal, many companies may now be put off going along this road, but it is worth seeking expert advice before companies turn their backs on these structures. The old adage, of ‘not throwing the baby out with the bath water’ definitely applies here.”

For further information regarding the full range of legal support available to businesses, please contact us.

From 6 April 2016, the Small Business, Enterprise & Employment Act 2015 is introducing new rules on identifying and recording who owns and controls UK companies and LLPs.

These entities will have to collect and keep information about people with significant control over them (PSCs). This includes those who own or control – either directly or indirectly – more than 25 per cent of the firm.

The new requirements necessitate companies to:

• Keep a PSC register
• Take reasonable steps to identify those who should be registered on the PSC register
• Record the PSC’s details and keep the register up to date
• Make the register available for public inspection
• Provide all this information to Companies House from 30 June 2016

BJ Chong, a partner and company and commercial law specialist with Palmers said: “This is a significant change to UK company law and will affect all UK companies, with the exception of listed public companies.

“Even if a company has no interests to be registered or it is dormant, it must still keep a register as criminal sanctions may apply for non-compliance.

“The Government is finalising the details of the new regime and it is expected that the draft statutory guidance will be in final form shortly. I would strongly urge any company affected by this change to seek advice because failing to do so will have serious legal repercussions.”

For further information on corporate legislation affecting your business please contact us.