Doing business in the UK

The main legislation dealing with company matters is the Companies Act 2006 ("Companies Act"). Typically, when US corporations come to the UK they will set up either:

• a subsidiary (typically a private limited company, which will be a separate legal entity and a wholly-owned subsidiary of the US corporation); or
• a branch (which is an extension of the US corporation itself, requiring public filing gin the UK to tell the world that the US corporation is now doing business in the UK).

Subsidiary

When corporations decide to enter the UK market for the "long haul", they commonly decide to create a local legal entity to employ people, enter into contracts and ringfence liabilities.

Establishing a subsidiary is often seen as a way of providing greater confidence and certainty for building business relationships – whether with employees or business partners.

Branch

Some companies feel that if they are testing a market, they do not want to bear the cost of a full legal entity set-up. It is quite possible for a US corporation to trade in the UK without a subsidiary – they must simply inform the UK Registrar of Companies (and the tax authority, HM Revenue & Customs) that they have a UK place of business (a "branch") and register the required particulars of the US corporation and of the branch. All the contracts made by the branch (including with employees) will be entered into by the main US trading entity, which will bear all the related obligations and liabilities.

Accounting aspects

Accounting aspects have an important role to play in the decision-making process: subsidiaries must file their own annual accounts at Companies House, while branches must file accounts that will include details of their US parent corporation's finances Local accountancy advice should always be sought. We can put you in touch with a local accounting firm if this is helpful.

Part 1: Corporate issues relevant to a potential UK subsidiary

All limited companies in the UK are registered at Companies House, an executive agency of the Department for Business and Trade. The main functions of Companies House are to:

• incorporate and dissolve limited companies;
• examine and store company information delivered under the Companies Act (including annual accounts and an annual "confirmation statement", which sets out key details in relation to the company such as the names of directors and shareholders). From March 2024 Companies House have additional powers to query and challenge such delivered information and can reject inconsistent filings;
• and make the above information available to the public.

Name

Under English law, the name of a private company (i.e. a company which cannot have its shares traded on a stock exchange) must end with the word "Limited" of which the permitted abbreviation is "Ltd".

The existence of a company does not of itself give any proprietary rights over the words comprised in its name as a business name or a trade mark. If required, we can advise you on trade mark registration that you might want to consider.

There are a number of boxes which need to be ticked in order to avoid your name choice being rejected by the Registrar of Companies:

• no two English companies can have the same (or very similar sounding) names (the Companies House website has a service allowing you to check this);
• a company name cannot contain any sensitive or offensive words;
• and a company name cannot: suggest a connection with a foreign government; contain computer code; give a misleading indication of the company's activities; be intended to facilitate an offence of dishonesty or deception or be used for criminal purposes.

Share Capital

Under English law, there is no maximum share capital limit. There is no minimum permitted share capital for a private company (although it must be more than zero). Transfer pricing rules for tax purposes may limit the tax deductibility of payments for companies, for example if the company has a high ratio of debt to share capital (referred to as being a "thinly capitalised" company). A private company must have at least one shareholder (also known as a "member"), who must hold at least one share.

It would also be worth considering at this stage the possibility of having more than one class of share. Having different classes of share allows different shareholders to have different rights in respect of, for example, dividends, voting and the ability to transfer shares.

The ability to create an ownership structure with different classes of share is especially useful if you are looking to attract private investment, as investors may require different rights to attach to their respective shares.

Subject to any restrictions in the company's constitution, shares are transferable by a simple printed transfer form and, when a transfer takes place, transfer duty (known as "stamp duty"), currently at the rate of 0.5% of the price paid for the shares, is payable by the transferee. However, when the transfer is between members of the same group or for a price below £1,000, no transfer duty will usually be payable. Shares traded on the AIM market are also exempt from transfer duty.

Directors

Formally a company will be managed by its directors. They will act both collectively (i.e. as a board of directors meeting periodically) and (particularly as regards executive directors) as individuals, under actual or ostensible authority as agents of a company.

English law does not have any nationality or residence requirements in respect of directors. The minimum number of directors is usually two (although it is permissible for private limited companies to have a sole director provided he or she is a natural person) and there is no maximum permissible number, although it could be inconvenient for a small company to have more than about five directors.

At least one director must be a natural person, i.e. not a corporate entity.

Currently it is still possible for UK companies to have directors that are themselves corporate entities. However, the law is changing so that, as from a date yet to be fixed, the use of corporate directors will be restricted.

One of the directors will often be appointed chair of the board of directors, who will also usually act as chairperson at any general meetings of shareholders.

Please note that, if the majority of the directors are from an overseas country, this could lead to central management and control of the UK subsidiary being exercised there. This may cause the UK subsidiary to be regarded as dual resident by HM Revenue & Customs (UK) and as resident in the overseas country by that country's tax authorities.

The only formal requirement for board meetings is that at least once a year a meeting must take place (or alternatively written resolutions must be signed by all the directors; see below) in order to approve the annual accounts. Whether formal board meetings should take place more frequently (and possibly at regular intervals, such as every month or every three months) is a matter for your commercial decision. Articles of Association usually provide for resolutions of the directors to be passed without holding a meeting, by circulating the resolutions for signature by all directors. The Articles can also provide for a director to participate in a board meeting by means of a telephone conference or video conference facility.

The incoming directors would be appointed by a resolution of the existing directors. Before the incoming directors can be formally appointed, they must give their written consent to act as directors.

You should also be aware that:

• a director who is an individual must be at least 16 years old;
• directors are subject to detailed duties and responsibilities under the Companies Act. Legislation currently going through the UK Parliament will soon require all new and existing directors to have their identity verified at Companies House.

If required, we can advise incoming directors on their personal duties and responsibilities as directors under English law.

Secretary

A UK company may have a secretary, who is an officer of the company, but there is no longer a requirement for a private company to have one. The secretary may be one of the directors but does not have to be and another individual or company may act as secretary.

English law imposes a significant number of duties on the secretary, including the maintenance of minute books and registers. Although English law does not have any nationality or residence requirements in respect of the secretary, as a practical matter the secretary is usually a UK resident.

We can provide company secretarial services to the subsidiary for an annual fee of £725 plus VAT and disbursements on the basis that the services are restricted to maintaining the minute books and registers, and ensuring compliance with specified Companies House requirements.

Registered Office

A UK company must have a registered office in the UK. This is the address for formal service of legal proceedings and other formal documents and must be an "appropriate address". An appropriate address is one where, in the ordinary course of events (a) a document addressed to the company, and delivered there by hand or by post, would be expected to come to the attention of a person acting on behalf of the company, and (b) the delivery of documents there is capable of being recorded by the obtaining of an acknowledgement of delivery. It does not need to be the principal, or indeed any, place at which your subsidiary carries on business, although in practice it frequently is. It cannot be a PO Box.

We can provide a registered office service to the subsidiary for an annual fee of £725 (£940 for a London address) plus VAT, provided that the subsidiary also uses and pays for our company secretarial service as set out above. As a practical matter, it is often convenient that the secretary should be based where either the registered office or the principal place of business is located. The registered office can be changed at any time with little formality (a board resolution and a form which is filed at Companies House). The only significant consequence of a change of registered office is that the tax district to which the subsidiary makes its corporation tax returns may change.

Email address

All UK companies must also provide Companies House with a registered email address, which Companies House will use to communicate with the company. Similar to the registered office, the registered email address must be "appropriate", meaning that emails sent to it will come to the attention of a person acting on behalf of the company.

We can provide a registered email address as part of the company secretarial service referred to above.

Auditors

A UK company must have auditors, who will be a firm of accountants, unless the company is exempt from the requirement that its annual accounts be audited in accordance with the Companies Act; for example if it meets the conditions of the small companies exemption. Companies will qualify for a small company audit exemption if they meet two of the following criteria: (i) they have an annual turnover of no more than £10.2 million; (ii) their balance sheet total is no more than £5.1 million; and (iii) they have on average 50 or fewer employees.

An auditor's role is not to act as a book-keeper (although it is permissible for a firm of accountants which provides book-keeping services also to act as auditors) but in effect to represent the interests of creditors and shareholders ensuring that the annual accounts have been prepared in accordance with the requirements of the law and of financial reporting standards, giving a true and fair view of the company's position at the financial year-end.

A company's auditors have a right of access at all times to its books and accounts and also to receive notices of and attend shareholder meetings and speak at them on any part of the business which concerns them as auditors.

Constitutional documents

A UK company will have two constitutional documents, the Memorandum of Association and the Articles of Association.

The Memorandum of Association, which must be in a prescribed form, simply states that the subscribers wish to form a company under the Companies Act and have agreed to become members and, in the case of a company that is to have a share capital, to take at least one share each. It must be authenticated by each subscriber.

The Articles of Association will regulate the way in which the company is conducted; dealing with matters such as the payment of dividends, appointment/removal of directors, transfers of shares and proceedings at director and shareholder meetings. The Companies Act provides default Articles of Association, known as "Model Articles". UK Companies can elect to adopt these in their entirety or create more bespoke articles by excluding or modifying some or all of these Model Articles.

The unaltered form of Model Articles are automatically adopted by a company in cases where a company does not submit any other Articles of Association with the incorporation Form IN01.

When deciding whether to rely on the Model Articles alone, consideration should be given to the wide range of uses the Articles of Association can be put to, and how they can meet the needs of your company.

As the document which governs the proceedings of the company, the Articles of Association can include provisions to cover all manner of subjects such as voting rights, dividend rights, termination of directorships, and the sale of shares.

This can be particularly important if an equity investor is involved. It may be equally important when considering who will be the members of the new company.

For example, it may be important to a potential shareholder that they have an equal number of shares to you. However, through the Articles of Association, you can agree that you retain a majority of the shareholder votes despite having an equal number of shares.

A further document which you may wish to consider creating (albeit one to which the company may not necessarily be a party) is a shareholders' agreement.

Rather than governing the relationship between the shareholders and the company, this document governs the relationship between shareholders. It can be another useful document when determining what rights different shareholders are to have.

As can be seen from the above, the constitutional documents of a company are a critical aspect to the formation of a company. If you would like help or advice in creating a tailored set of Articles of Association or shareholders' agreement, we would, again, be happy to assist.

Articles of association - example provisions

• Dividends: this article will deal with the important matter of when dividends are paid, in what proportion and to whom. Different types of shares may carry different rights to dividends.
• Exit/Liquidation: these articles dictate how the proceeds from the sale of the company or its liquidation are divided up between the shareholders.
• Voting rights: this article details the voting rights attached to each class of shares.
• Anti-dilution protection: this article may be included by an investor to protect it against future investments that occur at a lower price per share than the price paid by them at the time of their investment. This article can provide that the initial investor receives additional "bonus" shares if a lower priced investment occurs in the future. Allotment of shares: this article dictates whether new shares must be offered to existing shareholders before any third party (to prevent dilution of shareholdings).
• Transfers of shares: these articles dictate whether shares can be transferred by any of the shareholders and to whom. There is likely to be a list of transfers that are "permitted". If a transfer is not permitted or otherwise approved by the company, the shareholder may be required to first offer their shares to the existing shareholders before selling them to a third party.

Other formalities

As indicated above, UK companies have to maintain certain registers and minute books. The most important of these "statutory registers" is the register of members, which sets out ownership of the company's shares.

UK companies must maintain a register of "persons with significant control". The information on this register must be filed at Companies House. Persons with significant control may be the holders or controllers of a substantial minority (over 25%) of the company's shares or voting rights or may have or control the right to appoint a majority of the company's directors. They may also have significant control or influence derived from other means such as provisions in the articles or shareholders' agreement which permit them to amend the company's business plan or make additional borrowing. These measures are aimed at preventing the concealment of the identity of those who in reality control the company's actions.

New regulations were introduced in the summer of 2022 creating the Register of Overseas Entities. These require overseas entities that own property in the UK to register with Companies House and provide information about their registrable beneficial owners. A UK company must show in all of its business letters, orders, invoices and other business documents, its name and business address, its country and number of registration and the address of its registered office.

Company matters - shareholder thresholds and resolutions

The key percentage thresholds for a shareholder are as follows:

• holding shares that have more than 50% of a company's votes attaching to them; and
• holding shares that have 75% of a company's votes attaching to them.

The above thresholds apply to the following principal types of shareholders' resolution. An ordinary resolution, passed by a simple majority of votes cast by shareholders present and voting at a meeting of which the relevant notice has been given, is effective (among other matters) to appoint auditors and appoint/remove directors.

A special resolution, passed by a 75% majority of votes cast by shareholders present and voting at a meeting of which the relevant notice has been given, is required (among other matters) to alter the Articles of Association, change the company's name (unless the Articles of Association provide that the company's name can be changed by other means, for example, a resolution of the directors), reduce capital or place the company into voluntary liquidation.

Written resolutions

It is possible for private companies to dispense with meetings altogether and pass members' resolutions in the form of written resolutions agreed and signed by the relevant majority (or, in the case of a single member company, such as some wholly-owned subsidiaries, the sole member).

Part 2: Alternatives to incorporation

UK establishment

Alternatives to incorporating a UK subsidiary would be to create a UK establishment. An establishment is defined broadly as a "branch" or any place of business that is not such a branch that is located within the UK. A place of business would be anywhere that a company regularly conducts business or premises that indicate that a company may be contacted there. A branch conducts business on behalf of a company, not just business which is merely ancillary or incidental to the company's business as a whole. A branch allows a company to conduct business through local representatives in the UK rather than referring abroad.

In addition to the Companies Act, the main legislation dealing with a UK establishment is the Overseas Companies Regulations 2009.

UK establishment registration, filing and disclosure requirements:

• a completed Form OS IN01 (giving details about the company and its officers);
• a certified copy of the company's constitutional documents;
• a copy of the latest set of audited accounts required to be published by the parent company's local law; and
• the current registration fee (currently £71).

If there are changes to any of the information submitted then updates must be submitted to Companies House on one of a number of specified forms within 21 days of the change. We can advise in respect of any filing that needs to be made at Companies House. UK establishments of overseas companies whose parent law requires the publication of accounts which have been audited must deliver a copy of those accounts within three months of public disclosure.

All other UK establishments of overseas companies whose parent law does not require the publication of audited accounts must, within 13 months of a company's accounting reference date, deliver accounts to Companies House that comply with UK company law. Such accounts would relate to the wider parent group and not solely to the UK establishment.

UK company law requires for these purposes accounts to consist of, as a minimum, a balance sheet and profit and loss account, with a minimum of notes. No directors' or auditors' report is required, neither are details of directors' emoluments or pension contributions. A filing fee is payable on filing each set of accounts.

For advice or further information please contact:

• Chris Towle Corporate Partner - chris.towle@gowlingwlg.com;
• David Brennan Corporate Partner - david.brennan@gowlingwlg.com.

The legal framework

UK employment law is based on contract. It is part of the "Anglo-Saxon" tradition of employment, rather than the Continental European model which is less "contract-based" and much more State regulated. In the UK, while the employment relationships are governed by contract law it is within a statutory framework. Extensive legislation continues to develop at a rapid pace creating or modifying statutory rights.

England and Wales, Scotland and Northern Ireland each have separate legal jurisdictions and systems. Contract law in each country is largely the same, although there are some differences in Scotland. The statutory employment protection legislation is common to England, Wales and Scotland. While employment law in Northern Ireland is very similar, there are some notable differences particularly with regard to discrimination law addressing sectarian religious belief and political opinions.

The employment contract & status

All employees in the UK work under a contract of employment, whether in writing or not. A written employment contract is not required but is commonly provided to ensure that the intentions of both parties are clear. UK law requires that the employee is given a "Statement of Particulars of Employment" containing required information about the main terms of the employment on day one of employment commencing which should be updated as and when there are changes to those terms.

There are three main categories of employment status for employment law purposes: employees, workers, and the self-employed. The rights enjoyed by an individual under employment protection legislation flow from their employment status. At one end of the employment status spectrum are "employees" who are afforded the greatest level of protection. Rights which apply only to "employees" include the right to claim unfair dismissal, statutory notice periods, redundancy pay, the rights to maternity/paternity/parental leave and the right to request flexible working. At the other end of the spectrum are the self-employed who are not entitled to employment protection rights.

This category includes those who are genuinely in business on their own account. Somewhere in the middle are "workers" who are entitled to some key employment rights, including national minimum wage, holiday pay and rest breaks, discrimination and whistleblowing protection, pension auto-enrolment and since 6 April 2020 a Statement of Employment Particulars. Employment status for employment law purposes is not necessarily the same for tax purposes which only has two categories – employed or self-employed. We can advise you on the difficulties that often arise in identifying the boundaries of these three categories which often appear blurred.

Statutory rights - wages

Employees and workers are entitled to be paid the National Minimum Wage (NMW), which is reviewed on an annual basis in April. The current hourly rate for workers aged 20 and over is £11.44 and known as the "National Living Wage". For workers aged 18 to 20 the NMW rate is £8.60. Lower minimum amounts apply to younger employees and apprentices. The rates are revised annually in April. The new Labour Government proposes to expand the higher "National Living Wage" to those aged 18 and over. NMW is robustly enforced by HM Revenue & Customs.

There is a statutory sick pay scheme by which the employer must provide a minimum level of sick pay for up to 28 weeks. Many UK employers offer sick pay schemes that exceed the statutory minimum though this is not mandatory.

Statutory rights - working hours & annual leave

Working time and rest/annual leave periods are regulated under the Working Time Regulations 1998. Employees cannot, in general, be required to work for more than 48 hours per week (averaged over a 17 week period), although they can agree to opt out of this particular restriction. Employees are also entitled to a minimum of 5.6 weeks' holiday per annum for full-time employees that equates to 28 days each year. There is no obligation to give workers holiday on public holidays, but it is common to do so (forming part of the 5.6 week entitlement). Annual leave cannot be paid out except in the year of termination of employment. There are also required daily and weekly rest break requirements. The rest break requirements cannot be contracted out.

For leave years beginning on or after 1 April 2024, new provision apply in relation to "irregular hour workers" and "part-year workers" (such as casual workers or those working under a zero hours contract) based on 12.07% of hours worked in a pay period. Holiday entitlement can be tricky. We can advise you on the difficulties that often arise in identifying the correct basis for accrual and pay calculations.

Statutory rights - family-friendly

UK law also provides for specific "family-friendly" employment rights which are complex. Pregnant employees are entitled to paid time off for antenatal care appointments. Employees, subject to certain qualifying conditions, may have rights to maternity pay, paternity leave and pay, and adoption leave and pay. Specifically, female employees, regardless of their length of service, can take up to 52 weeks of maternity leave, and may be entitled to maternity pay depending upon the level of their earnings and their length of service. Statutory maternity pay is 90% of "normal" pay for the first six weeks of maternity leave and then at the lower weekly rate of £184.03 (or, if lower, 90% of "normal" pay) for up to a further 33 weeks (rate reviewed annually in April). 92% of the cost can be recouped through the tax system. Mothers can choose to curtail their maternity leave and opt into "shared parental leave". This enables mothers to elect to convert a portion of maternity leave so that up to 50 weeks' leave and 37 weeks' pay can be shared between both parents. It is a criminal offence to allow a woman to return to work in the first two weeks following giving birth (four weeks in factory settings). Statutory Adoption leave and pay provisions largely mirror the maternity provisions. Statutory paternity leave and pay of two weeks' salary is also available to fathers who have been employed for more than 26 weeks within 56 days of the birth of a child. It is common for employers to offer enhanced contractual maternity, adoption and paternity pay.

In addition, all parents (fathers, mothers and adoptive parents) who have one year's service are entitled to up to 18 weeks of unpaid parental leave. Parental leave can be taken any time before the child's 18th birthday. No more than 4 weeks' unpaid parental leave can be taken in any given year. Employees also have a right to reasonable unpaid time off to deal with family emergencies.

Employees who lose a child are entitled to 2 weeks' parental bereavement leave and (subject to qualifying conditions) pay.

Since 6 April 2024 employees who are caring for a dependant with a long-term care need (regardless of age) are entitled to one week of unpaid carer's leave per year.

Statutory rights - part time and flexible working

Part-time workers must not be subjected to less favourable treatment than full-time workers on the basis of their part-time status. Where possible the benefits for full-time workers should be pro-rated for part-time workers.

Employees with at least 26 weeks' continuous service have the right to make a request for a flexible working pattern for any reason. The employer must deal with the application in a reasonable manner and may only refuse a request for one (or more) of eight specified (though broad) reasons.

The UK's demand for a flexible workforce and the use of temporary agency workers remains strong. After 12 weeks' service, temporary agency workers have a right to the same basic working and employment conditions and pay as employees recruited directly by the hirer.

Employee benefits

There is no legal requirement for employers to provide for medical insurance but it is not uncommon to do so, particularly for senior employees. This benefit does not have the same importance in the UK as in some other countries and is generally not thought to be crucial to the recruitment process. The National Health Service in the UK is regarded by many employers and employees as adequate. Private medical insurance does, however, offer the individual more flexibility over the speed and timing of treatment.

Employers in the UK are required to enrol all eligible workers into a qualifying workplace pension scheme. Enrolment is automatic for all eligible workers unless they actively "opt out" of their workplace pension. The employer is obliged to pay mandatory minimum contributions.

Other common benefits include: permanent health and life insurance, employee assistance programmes and share options/performance related bonuses.

Equality

The law on discrimination is very well established in the UK and is consolidated in the Equality Act 2010. The Equality Act 2010 protects employees and workers from discrimination (direct and indirect), harassment and victimisation on the basis of certain characteristics, known as "protected characteristics". These are; age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation. Discrimination law covers the whole of the employment cycle. It impacts job adverts and the recruitment process, terms and conditions of work, conduct during employment, dismissal and any work-related matters arising after employment has ended, such as giving references. Compulsory retirement will amount to a form of age-related discrimination, unless it can be objectively justified.

Diversity training for staff and implementing a diversity/equal opportunities policy to avoid discrimination in the workplace are essential for all companies employing staff in the UK. If an Employment Tribunal finds an employee has been discriminated against they can award compensation, which is uncapped.

Employers must give men and women equal pay, terms and conditions. Gender pay gap reporting requirements for employers with more than 250 employees have been in force since April 2017. It is expected pay gap reporting will soon also be required in rational to race and disability.

Protected disclosures & anti-corruption

Under the Public Interest Disclosure Act 1998, workers who "blow the whistle" on their employer by making a protected disclosure (a disclosure in the public interest concerning a statutory proscribed relevant failure (for example an alleged criminal offence or other breach of a legal obligation)) have the legal right not to be dismissed, selected for redundancy or subjected to any other detriment for having done so. There is no required qualifying service and compensation is uncapped for claims linked to whistleblowing.

The Bribery Act 2010 requires organisations to implement a programme to prevent bribery and ensure there are "adequate procedures" in place to prevent bribery being committed on its behalf.

Business transfer and outsourcings

The provisions of the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") apply to many mergers, acquisitions and outsourcings in the UK. In simple terms, the employment of the employees working in a purchased business or service provision will transfer on the same terms and conditions of employment (excluding some pension provisions) to the new owner or service provider. The employees also have enhanced protection against dismissal if the reason for dismissing them is related to the transfer. TUPE also applies to a "service provision change" (outsourcing or insourcing). It is not possible to contract out of TUPE requirements.

This is a complex area with information and consultation obligations and legal advice should be sought at an early stage on the employment law implications of any transfer.

Collective issues

In contrast to EU member states, works councils are rare in the UK. Employees are only normally collectively represented through trade union recognition (relatively low in the private sector) or where statute requires employee consultation, most notably in relation to collective redundancies (20 or more redundancies within a 90-day period) and transfers of undertakings. Crucially, no consultative body has the power to block or even delay any actions of the employer, albeit there may be financial penalties to reflect failures to comply with specific statutory requirements.

Business protection

Non-compete provisions and other post-termination restrictions are not generally enforceable as being in restraint of trade. However, an employer may enforce these if they protect a legitimate business interest, go no further than is required, and in addition are reasonable in scope. Noncompete provisions should be tailored to the relevant employee's role to ensure that the provisions are appropriate and reasonable in the circumstances. The reasonableness of a restrictive covenant is judged at the time it was entered into, not when the employer seeks to enforce it. It is important to tailor restrictive covenants to the particular employment and to review them particularly when an employee is promoted.

Termination of employment

There is no "employment at will" in the UK. Employment is terminable either by giving notice, or in limited and exceptional circumstances, with immediate effect where the employer has cause to dismiss. The statutory minimum notice periods (dependent on length of service) that employers are required to give are as follows:

• For employees with one month to two years' service, one week's notice.
• For employees with more than two years' service, one week's notice per completed year of service up to a maximum of 12 weeks.

Employees must give at least one week's notice of termination. Notice periods can be extended by contract.

If an employee's job becomes redundant they will be entitled to a statutory redundancy payment, provided that they have been employed for at least two years. Broadly speaking, a redundancy situation arises where there is (i) a business closure, (ii) a workplace closure or (iii) a need to reduce the workforce. The entitlement will depend on age and length of service but will not exceed £19,290 (rate reviewed annually in April).

If an employee is dismissed after more than two years' service then they will have the right not to be unfairly dismissed. This applies even where the employer complies with the notice requirements or is entitled to dismiss without notice. A dismissal will be unfair unless:

• there was a valid reason for dismissal (i.e. one of the statutorily prescribed reasons); and
• the dismissal was handled in a way that was procedurally fair.

The current two year qualifying service requirement is expected to be removed shortly. Instead unfair dismissal protection will be a day one right, though probationary periods will be permissible.

Any compensation awarded for a finding of unfair dismissal will be made up of two elements: a basic award (which operates in the same way as the statutory redundancy payment) and a separate award to compensate the employee for loss of income which can be up to £115,115 (rate reviewed annually in April) or 12 months' salary, whichever is the lower.

Fixed-term contracts are possible, but they are subject to specific regulations. Where the fixed term is for two years or more, the fixed-term employee is still entitled to be given protection from unfair dismissal for non-renewal. Regulations also limit the use of a series of fixed-term contracts which take an employee over four years' continuous service. As such, they do not necessarily represent less of a risk than "ordinary" employees.

When it comes to employment law, the best option is always to avoid problems in the first place. Our team can help you to reduce risk while ensuring managers act commercially. Using overseas workers Free movement of overseas workers from within the European Economic Area (EEA) to the UK ended at 11.00pm on 31 December 2020. EEA nationals residing in the UK by that time had until 30 June 2021 to apply for immigration status under the EU Settlement Scheme.

The UK immigration system for migrants coming to work, invest or set up in business is largely contained in a points-based system. Some categories that relate to business or employment remain outside of the points-based system (such as the "Representative of an Overseas Business" category). The immigration rules are complex, subject to ongoing change and difficult to navigate. Specialist advice will be needed at the relevant time. For advice or further information please contact: Jonathan Chamberlain Employment Partner jonathan.chamberlain@gowlingwlg.com

Intellectual property ("IP") includes patents, designs, copyright (covering for example written and artistic works such as web pages, product brochures and software), database rights, registered trademarks, rights in passing-off (a cause of action essentially protecting unregistered trademarks/branding) and rights in confidential information or trade secrets (e.g. in customer lists and manufacturing processes).

Some IP rights (e.g. copyright, unregistered design rights) arise automatically provided subsistence criteria are satisfied, which may, for example, depend on the nationality or employment status of the author. Other IP rights arise on registration (e.g. patents, registered trademarks, registered designs).

IP rights are territorial. Registered IP rights covering the UK are sought from and granted by the UK Intellectual Property Office (UK IPO) or pursuant to an international treaty-based system enabling a multi-jurisdiction application procedure for patents (the European Patent system and/or the PCT system), trade marks (the Madrid system) or designs (the Hague system).

Until 31 December 2020, the UK remained within the EU-wide regimes for protection of IP rights but on that date the UK ceased its participation in those regimes, most notably the EU trade mark system, the Community registered and unregistered designs rights system and the Community plant variety rights system. As of January 2021, for each existing EU-wide right the UK automatically created a national UK right of the same scope; for applications for rights that remained pending on 31 December 2020, the applicant had a nine-month window to refile the application in the UK for a UK national right of the same scope while maintaining the benefit of the same relevant dates as the pending EU application.

For IP rights that were already national in scope (for example, UK and European patents, supplementary protection certificates, UK registered trademarks, UK registered and unregistered design rights, copyright, trade secrets and UK plant variety rights), the regimes existing on 31 December 2020 continued to operate. The UK is not within the Unified Patents Court and Unitary Patent system.

Since 31 December 2020, the UK has continued to recognise the placing of genuine goods on the market in the remaining EU/EEA (or the UK) as exhausting the relevant UK rights. Whether, post-Brexit, the UK's exhaustion regime will become more international remains to be tested in the courts.

We can assist with navigating the law in this area and advise on how to manage commercial arrangements most effectively in light of them.

Generally under UK legislation, any IP created by an employee (i.e. someone employed under a contract of service rather than an independent contractor under a contract for services) in the course of their employment is owned by their employer. However, the employer's rights can in some cases be extended by contract and/or the duties of the employee in relation to IP creation can be made more specific. We can advise and assist in the preparation of any service agreements to protect your interests to the fullest possible extent to ensure that, for example, employees cannot use material for their own purposes if they were to set up their own business having left the company. However, it is not possible to protect generally transferable knowledge and skills developed through the course of employment.

If IP is created for you by an independent contractor (e.g. software developers or website designers) the IP will generally be owned by them, subject to any agreement to the contrary. Therefore it is important to obtain assignments of IP when dealing with contractors.

Transfers and licences of UK IP rights, as well as agreements governed by English law, should contain the necessary checks and measures to ensure that they are English law compliant. Additionally, transfers of UK IP rights should be registered at the appropriate UK IP registries to ensure that you do not lose certain rights in any future litigation, or lose rights of priority as against third parties acquiring rights in your IP. We can help with this.

Particularly for technology companies, copyright is an important asset. Copyright arises immediately on the creation of an original literary work or artistic work. "Original" in this context means in the sense that it is its author's own intellectual creation; that the author was able to express their creative abilities in the production of the work by making free and creative choices so as to stamp the work created with their personal touch (and that it is not copied from other work).

Certain works can be protected as trade secrets or confidential information, which means that they can be monopolised forever (e.g. the Coca-Cola recipe) or at least for as long as you can keep the work secret. A trade secrets strategy should be a critical part of any IP and business plan. It allows you to identify and develop valuable and confidential information relating to your business offering and effectively implement the policies and processes, and deploy the required resources, needed to maintain and extract value from it. Having a robust trade secrets policy also allows you to identify and enforce any misappropriation or misuse of those trade secrets. Our trade secrets lawyers will help you put a trade secrets policy at the heart of your organisation's overall IP strategy enabling you to fully profit from your innovations.

Trademarks are only protectable in the UK where goodwill has arisen in the UK (which usually requires trading activity within and focused on the UK), where they have been registered for the UK, or where they existed as an EU trademark on 31 December 2020 and at the first renewal arising since then have been renewed in the UK. This means that it is possible that the trademark that you currently freely use at home may infringe someone else's trademark when you start to use it in the UK. In addition, the trademark protection that you enjoy at home will not extend to the UK. Therefore you may wish to consider carrying out a trademark search to ensure that you can use your intended trademark in the UK and/or protecting your name and/or logo by registration as a UK trademark (protecting against infringement of the trademark in the UK) or, if you have plans to expand into the rest of Europe, an EUTM.

The ® symbol may be used in the UK in connection with a trademark that is registered in the UK, and the TM symbol may be used in connection with unregistered trademarks, in order to alert third parties as to your rights. It is worthwhile having brand guidelines in the UK for your business and agencies to use, as it may be easy to lose your UK trademark rights if you do not use your trademarks consistently.

Like trademarks, designs can be registered or unregistered. If you have a potentially valuable and original 2D or 3D design, it may be wise to register and exploit it. We can help in this assessment.

For advice or further information please contact: Kate Swaine Intellectual Property Partner kate.swaine@gowlingwlg.com

The UK has the UK General Data Protection Regulation ("GDPR") which is the retained version of the European General Data Protection Regulation 2016, and the Data Protection Act 2018.

The UK GDPR applies to all "controllers" who process personal data in the UK and organisations based outside of the UK but who monitor activities of those in the UK or sell to those in the UK. So even those based outside of the UK can be caught by the legislation.

Some parts of the legislation also apply to "processors" of personal data (those entities who process data on behalf of controllers, under their instruction). So it is important to understand in what capacity your organisation handles data, which will be different in different contexts e.g. for employee data, customer data or supplier data. Some aspects of the UK GDPR are mandatory, for example both controllers and processors have to maintain a 'record of processing'. Controllers have to register with the regulator in the UK and pay a fee (unless they are exempt), controllers must have a privacy notice explaining how they process data and breaches of personal data must be notified to the regulator, and in some instances to individuals too.

Contracts between controllers and processors have to contain a mandatory set of clauses as a minimum. Where data is shared between two controllers, each controller must comply with the regulator's Data Sharing Code of Practice, which often involves signing a Data Sharing Agreement which documents various aspects of the parties' compliance.

New projects, services or activities which involve higher risk processing (for example because data subjects are being systematically monitored or where datasets are being combined to match information about individuals) must be assessed for compliance through a 'data protection impact assessment'. The controller has the obligation to carry out the assessment, which must document the context of the processing, the types of personal data, categories of data subject, flow of data and then document how that activity will be compliant with data protection legislation.

Adherence to the other data protection principles requires an analysis of an organisation's data flows to interpret how the requirements of the legislation apply to that particular organisation and its data.

Compliance is more than a tick-box exercise as the legislation demands that controllers are 'accountable' for their processing of personal data. If that was not enough, the GDPR is backed by a regime of enforcement powers exercisable by the regulator, which at its most extreme can result in fines of up to 4% of an organisation's global annual turnover, or £17.5 million. Data breaches are increasingly under the spotlight and the negative press associated with a breach can be as damaging as the internal costs, or any enforcement action.

For advice or further information please contact: Jocelyn Paulley Data Protection Partner jocelyn.paulley@gowlingwlg.com