Greenberg Traurig Maher

BoardroomIn a recent case, Smithton Ltd v Naggar [2014] EWHC 680 Ch, the Court of Appeal reconsidered the difference between de facto and shadow directors.

A de facto director is a person who performs the functions of a director but who has not been formally appointed as such (s250 Companies Act 2006 (“CA 2006”)). Whereas, a shadow director is a person in accordance with whose directions or instructions the directors of the company are accustomed to act (s251(1) CA 2006).

Smithton Ltd (the “Company”) claimed for loss suffered after two of its clients became insolvent and defaulted under their contracts. Both of these clients were introduced to the Company by Mr Naggar, who was a director of the holding company, Dawnay Day International Limited. The Company claimed that Mr Naggar was either a de facto or a shadow director and had breached his statutory duties towards the Company, in particular, his obligations to disclose conflicts when he had introduced the two clients.
Continue Reading Legal Update: De facto vs shadow directorships

On 26 September 2014, the Competition & Markets Authority (“CMA”) issued its final order implementing changes to the UK’s statutory audit market (the “Final Order”). By way of background, this action represents the final step in a process which commenced in March 2011 when the House of Lords Select Committee on Economic Affairs urged the Office of Fair Trading (“OFT”), the CMA’s predecessor, to investigate the UK audit market. Following an initial investigation by the OFT, an in-depth analysis of the market by the Competition Commission (“CC”) – now also subsumed into the CMA – concluded that competition in the audit market was restricted by factors which inhibit companies from switching auditors.
Continue Reading The Competition & Markets Authority Imposes Changes to the UK’s Audit Market with Significant Implications for FTSE 350 Companies

The new Public Sector Directive 2014/24 (the New Public Sector Directive) on public procurement entered into force on 17 April 2014. This replaces Directive 2004/18. The New Public Sector Directive is accompanied by two other new directives, those for utilities and concession contracts respectively. Member States have two years to implement the New Public Sector Directive into national law. However, the UK government believes there are efficiencies to be gained for the national economy by its early implementation. To this end the Cabinet Office has recently published for consultation a draft version of the Public Contracts Regulations 2015 (the Draft Regulations). Whilst the government is keen to encourage dialogue regarding the Draft Regulations, it also points out that the vast majority of the content of the Regulations must be included in accordance with the New Public Sector Directive. As such, the consultation will not result in any dramatic changes to the Draft Regulations. The Cabinet Office has also stated that it has adopted a “copy out” approach in line with the Coalition’s policy of avoiding “gold plating” legislation wherever possible.
Continue Reading Consultation on the New Public Sector Regulations

A new consultation document has proposed that the Disclosure of Tax Avoidance Schemes (DOTAS) rules should be widened so that more tax schemes will be caught by new powers requiring accelerated payments of tax.

Under the DOTAS regime, the promoters of certain kinds of tax schemes are required to notify HM Revenue & Customs (HMRC) with those schemes’ details. Once notified, HMRC will issue the scheme with a DOTAS number which then must be included on any tax returns relating to the scheme. However, HMRC’s issuance of a DOTAS number does not indicate that it has approved the scheme as being compliant with tax rules.Continue Reading UK Government Proposes an Expansion of the DOTAS Rules

HomesA liquidator of a tenant is entitled to disclaim onerous property (including leases). This terminates the rights and liabilities of the tenant under the head lease.

Any person with an interest in a disclaimed lease can apply for the lease to be vested in them within three months from the disclaimer. A head landlord can only apply once any subtenants and mortgagees have refused a vesting order, which has the effect of determining that party’s interest in the property from that point, bringing such sublease or mortgage to an end.
Continue Reading Subtenants position following disclaimer of head lease