Commercial and business law

How To Get More For Your Property

blogger / November 15, 2021

If you’re looking to sell your property but want to ensure you get the best possible valuation, you’re definitely not alone. Between December 2019 and December 2020, over 619,000 residential properties were sold, the government previously declared on gov.uk.

In order to achieve an excellent valuation, you’ll want to consider the following factors. Neglecting them can have far-reaching consequences, so even if you think they do not immediately apply to you, knowing what your buyer is looking for can be invaluable knowledge.

Kitchen & bathrooms

When a buyer is researching a property, the first factors they will often look for are the number of bathrooms and the quality of the kitchen.

Whether the bathrooms are en-suite, how they are spaced out around the property, and how many there are will be taken into account, so it is important to be prepared. If you are looking to improve the valuation of your property, consider adding an extra bathroom if necessary, or turning an existing bathroom into an ensuite. Even a simple change can make all the difference.

As for the kitchen, ensure that appliances are modern, and the room has a bright, airy quality. As plenty of time is spent in the kitchen, you’ll want to make sure that it gives a great first impression. Even if the kitchen is not going to be furnished, making sure there is plenty of space and good access to adjoining rooms is a definite plus.

Presentability and maintenance

One of the first tasks to undertake when preparing a property for valuation is ensuring it is properly cleaned. This extends to more than just removing clutter and taking out the rubbish, however.

Make sure to keep a keen eye out for any potential signs of mould, mildew, or dampness. Often these can be indications of a much larger humidity or ventilation issue. Addressing this in advance can help you save time and money. If you can see it, so too can the person providing the valuation.

Presentability also extends to the outside of the property. If there is a garden, is it properly maintained? First impressions matter. The interior of the house can be lovely, however an unkempt exterior can leave a bitter taste in the mouth of your buyer.

What is your properties’ unique selling point?

As the seller of a property, you want to capitalise on anything that can give you the edge, and increase its value. Consider what makes your property truly stand out.

Is it the open-plan design? The modern interior? Perhaps the traditional, historic furnishing? No matter what it is, large or small, it’s likely that your property has something truly special to offer.

If you can find a way to highlight your properties’ unique selling point and make it the focal point, you’ll be on your way to achieving a better valuation for your property in no time.

What Causes Businesses To Go Bankrupt

blogger / October 10, 2021

Bankruptcy is one of if not the worst thing that could happen to a business.

Not only can it spell the end for the entire company, but it can affects employees, partnering businesses and directors. However, while bankruptcy is a common term, many still aren’t aware of the primary reasons that can cause it.

If that’s you, please read on as we discuss what causes businesses to go bankrupt.

Top reasons Why Businesses Go Bankrupt

In 2019 over 10,000 businesses in the UK went bankrupt. And that was in a pre-pandemic world.

In the US (as with the rest of the world), the picture looked even bleaker in 2020 and moving into 2021. Covid 19 played a role in a number of big US businesses declaring bankruptcy. While in the UK, it is estimated that 900,000 small businesses are at risk of failing due to the pandemic.

Covid 19 aside, there are some other common reasons why businesses go bankrupt.

Financial Troubles

If a company can’t maintain a positive cash flow and generate enough revenue, it could negatively affect its financial stability. For startups and small businesses, not receiving enough or, worse, any funding from VCs or investors can lead to failure, thus bankruptcy.

And it’s not just funding. Startups need to keep an eye on expenses to make sure they don’t start accumulating debt.

Unwise Corporate Decisions

As a business is about management, making bad decisions and unwise strategies can lead to bankruptcy. It could be a pivot to a new market, manufacturing processes, or focus for a particular goal. Whatever it may be, every decision counts and can affect its stability and position in the market.

Having bad agreements in place or not putting agreements into writing can cause significant legal headaches. Agreements could be with partners, directors and employees.

Market Instability

Since the market is volatile, it’s uncertain what product will boom next, what company will rise, and what type of business will hit a snag. Accordingly, new competitions, failure to adapt to the market, and sudden economic changes can potentially make a business close.

For businesses in the UK, much instability was (and still is) caused by Brexit as businesses and consumers try to navigate any new regulations around trade.

Some startups have already reported significant increases in paperwork due to Brexit.

Tax Issues

If a company can’t manage its tax correctly, it could highly affect its financial position. Filing late or inaccurately can incur additional fees and penalties. Lastly, due taxes in the past months can add up.

Accidents

Accidents like fire, theft, storms and other external causes can, unfortunately, lead a business to go bankrupt. When an accident destroys the office, damages tangible assets, and renders essential tools and machines useless, it can take time for a company to recover. While some can survive with insurance or investor’s help, many will still choose or cannot take action to avoid bankruptcy.

Final Words

Bankruptcy can happen due to financial issues, market instability, tax irresponsibility, ineffective strategies, and unwanted accidents. While many businesses gave up, others also strived to stay afloat. With careful planning, good market strategy, punctuality, and considerations for the future, a company can succeed and have enough resources to avoid bankruptcy.

7 things to know about doing business internationally

blogger / September 17, 2021

There are a number of factors to consider when doing business internationally. If you are wondering how to do business internationally, you must ask yourself some questions first.

How do I want to structure my business?

There are many different business structures to consider, each with its own benefits and drawbacks. The most important thing to consider is how much money you are making. Figure out what you want to do, then choose a structure that will get you there.

If you are just starting out, an LLC or corporation may be best because of the limited liability it offers. If you have enough money to hire people, an S-corp is a good option because it has lower administrative costs than a C-corp. You can be your own boss but still have the benefits of being a corporation.

If you have enough money to pay yourself a salary and cover all of your expenses without taking on debt, then an LLC or Sole Proprietor may be the way to go. But if your business is growing and will need financing, or if there is a possibility that you might not meet your financial obligations, then a C-corp or S-corp may be right for you (these apply to US businesses specifically).

What kind of partnership agreement should I make?

Businesspeople are often so eager to get moving on a deal that they overlook one of the most important decisions they’ll ever make: what kind of partnership agreement to make?

You can have two kinds of agreements. One is an informal partnership. You are partners with the owner of the business, and if either of you moves on, the other one gets to take over the whole thing.

The other kind is a formal partnership. It is like a limited-liability corporation (LLC) or a corporation without stockholders; it has its own legal personality; you can buy and sell shares in it; and if you move on, your shares don’t go to your heirs but are offered for sale.

Will I require a letter of credit?

When you are doing business abroad, one of the first things you will need to do is arrange payment. This is easier to do if your customer does not have a bank account in the same country as you.

Most banks will refuse to issue letters of credit for payments made to accounts in other countries.

The exception is when you are dealing with an international company that does business all over the world.

Such companies may be able to provide you with a letter of credit that states that they will be liable for making the payment required by your contract.

A letter of credit requires you to present your claim on funds in the issuing bank’s local currency. You will need someone who understands how letters of credit work and can advise on whether this would suit your needs.

Will my payments be made in U.S. dollars or foreign currency?

If you’re doing business internationally from the U.S., , you’ll need to decide whether your payments will be made in U.S. dollars or foreign currency.

There can be several advantages and disadvantages to both approaches, so it’s a good idea to thoroughly examine the situation before deciding which method is best for your business.

One main advantage of making all payments in U.S. dollars is that you only have to account for one currency exchange rate on monetary transactions.

This is significant if your company does business in more than one country, especially if those countries use different currencies.

Using the same currency for all transactions simplifies recordkeeping, reduces accounting errors and can make bookkeeping easier. However, there are also some disadvantages of using U.S. dollars in international trade.

If you use U.S. dollars, you also need enough cash on hand to cover your expenses when they occur, whether that is in the United States or overseas. This may require that your company maintain a large amount of liquid assets in U.S.-dollar-denominated assets on hand at all times, which could have an impact on the efficiency of your company’s cash management system and overall liquidity needs.

What price will I sell my products and services for globally?

For example, if you are selling electronics, you probably want to have them be just as cheap in Brazil, Mexico, Saudi Arabia, Germany, China, Japan and the United States.

As you expand internationally, it’s important to realize that price isn’t the only thing people are paying attention to. For example, they may want something that is inexpensive but they also want it to be prestigious. They want everyone to know that they paid a lot for their product or service. This means that some of your competitors may be able to charge more than you do while still selling more units.

When entering international markets for the first time you can find yourself at a disadvantage because of things like cultural differences. You need to be respectful of cultural differences when entering new markets. Do some research on how people in different countries perceive things like quality, service and the value of your product or service.

Will I need to negotiate new agreements with manufacturers and distributors and what type of contract(s) will I use?

If you are planning to expand your business internationally, you must first determine if your product will be successful in the new country. If the answer is yes, you must begin to negotiate new agreements with manufacturers and distributors. It is important to know what types of contracts you will use.

Once you have analyzed your market and decided that the product you are selling will be successful, then it is time to go ahead with negotiations.

The first step would be to contact a legal firm in the foreign country or a law firm specializing in international trade. They will give you advice on what type of contract(s) will need to be drawn up for each area of operation.

One of the most important factors in determining what type of contract(s) will be needed is whether or not you are dealing with a foreign government.

Government contracts are usually awarded through an open bidding process, which requires a different process for negotiating and drafting contracts than private sector agreements.

Do I need to register my trademarks, copyrights, patents and/or licensing agreements with the countries in which I do business?

You may need to register your trademarks, copyrights, patents and/or licensing agreements in the countries in which you do business.

The majority of countries require an application to be made by a local representative. Some territories also require the filing of a Declaration of Use or Excusable Nonuse.

You should ensure that your applications are filed correctly in order to avoid future difficulties in defending your rights in the country.

You should also consider seeking advice from a local attorney before filing, especially if you are dealing with “gray market” products or entering into licensing agreements for products that are protected by foreign patents or trademarks that are registered but not licensed in your home territory.

They may be able to help you negotiate with the owner of the rights so that they agree to grant you a non-exclusive license.

Can I still buy a business in the EU?

blogger / June 28, 2021

E&G Solicitors in Spain explain some of the things to be aware of when looking to buy a business in one of the most attractive business locations in Europe.

Common businesses opened by British expats in Spain often revolve around the tourist industry such as bars, cafes and B&Bs.

Non-EU citizens starting a business in Spain and living there will need a valid work permit to do so. This is applied for at the Spanish embassy in the UK (or your home country).

You will need to provide evidence that you have enough capital to invest in your business as well as supporting yourself while living in Spain.

You may be required to submit a business plan to demonstrate the strategy and proof of your skills or experience. You may also stand a better chance if you can demonstrate how you will create jobs for Spanish people..

You can apply for resident status after five years but until then you’ll need to renew your work permit every year.

Points to consider when buying a business in Spain

When buying a business in Spain, you should have access to the business accounts for the past 3-years. This will help you decide how to structure the business as well as understand the company’s tax position and various other considerations.

An impartial Spanish accountant can help you analyse the last three years’ accounts. If the business does not have three years of accounts, then there may be no value to it at all. You should be certain of the value of the business you are buying.

How you structure your business is important, whether that be a sole trader, partnership or limited company.

It’s wise to avoid personal liability altogether. Hence setting up as a limited company with public liability insurance is often a good route.

Be aware that if you reside in Spain as you take over your new business, you will be liable to tax in Spain on all of your worldwide assets

If the business you are buying is a going concern and involves purchasing a property, then you need to decide whether it will be in your own name or that of the business

Consider the market for your business: are you expecting to build on an existing reputation or will you be changing its focus. Do your research and have a strategy.

Understand why the existing owners of the business want to sell. If the reason is insufficient revenue, then you may want to think twice about your purchase. Review the accounts in advance can help you make this decision.

After Brexit

While non-EU citizens who are not residing in Spain may be required to prove they have the capital to buy a business, EU Nationals who live in the EU can set up partnerships or Trade as sole traders with no minimum investment requirements in Spain.

You just need to be aware of the responsibilities as the business owner as well as the various rules and structures of business in Spain.

Is It Better To File Bankruptcy Before or After Divorce?

blogger / May 18, 2021

A divorce can be a challenging experience in your life. It can be even more stressful if you are going through bankruptcy at the same time.

Whether you should file for bankruptcy before or after your divorce will depend on the situation. You could go through both at once, but some jurisdictions will focus on one point over another.

When To File For Bankruptcy Before a Divorce

You can file for bankruptcy first if you have substantial marital debts. A bankruptcy can cancel out some of these debts that would be divided during the divorce proceedings.
Filing first is also best if you have various properties that might be divided between you and your partner. By liquidating some of these assets, the divorce process will be easier to manage and less expensive.
You can also file before the divorce if you have concerns about legal fees. Filing a joint bankruptcy will be more affordable than if each person filed separately.

When To File For Bankruptcy After a Divorce

You can file for divorce first if you could qualify for a Chapter 7 declaration after the divorce. You will qualify for Chapter 7 if your income is below the median in your state. It is easier to get here if you don’t earn as much money as your partner.
You may also have an easier time paying off a Chapter 13 declaration after a divorce, as the amount you would spend each month in the repayment process will be minimal. This point works if you earn a consistent income and have enough money on hand to handle some of these expenses.

Check the total values of your debts and assets before deciding when to file for bankruptcy. Look at the types of debts you have and your income to see what can work the best.

How UK Startups Can Avoid Bankruptcy?

blogger / April 28, 2021

Careful prioritisation of products and services, controlling your expenses and getting the right legal advice from the start are all great ways to avoid bankruptcy for startups.

Ways Startups Can Avoid Bankruptcy

1. Control expenses

Spending less than you earn sounds like a simple principle, but it’s easier said than done. There are a number of up front costs including fees to suppliers, premises and even production costs of new products.

Keep an eye on your expenses daily, weekly and monthly – ideally planning ahead to see what you are likely to spend. If you aren’t a numbers person, it’s worth getting someone else to look at it for you.

Keep the non-essential gatherings, events, and other related expenses to a minimum. Lastly, it’s also better to check whether the office upgrades, service subscriptions or memberships and in-house meals are essentials that add value or not (probably not).

An accountant for startups can help you control your expenses.

2. Prioritize improving products or services

Ensuring the quality of products and services is also a way to avoid bankruptcy. When you provide an exceptional product or service, you can exceed the expectations of consumers, resulting in more revenue. Additionally, this will help you to stay competitive in a challenging industry.

While improving the products and services are the primary goals, understanding the current and future market trends is also essential. You can learn about what is in demand or is growing in popularity to adjust advertising, production focus, and build out a plan accordingly.

3. Repay debts

Debts are a big reason why companies go bankrupt. Due to high payment responsibilities and market struggles, founders often sell or give up their businesses to fulfill debts. Furthermore, while established companies can manage these obligations well, startups might find it challenging and overwhelming, especially in the later periods.

Instead of suffering the consequences, it’s best to prioritize paying debts, especially secured or debts with collateral. Also, clearing ones with higher interest first would help in saving money in the process. However, if it’s possible to avoid borrowing all together, then that’s always a good idea.

4. Get the right legal advice

An experienced commercial solicitor can provide your startup with the best legal advice from the start, ensuring you have the right contracts in place with partners, suppliers and customers as well as advising on how best to go about getting funding.

You may even need advice on how best to structure your startup for success.

For commercial legal advice check out Crest Legal.

5. Hire and keep excellent employees

Take care of the existing employees. If a startup has excellent employees, it can efficiently attain goals, deliverables and compete in the industry. Good employees contribute to a great culture.

If a company can’t provide high salaries to attract top-performing prospects, offering equity or stock grants with a lower wage is a compelling offer. Lastly, having an ideal environment, ethics, and perks, makes employees happy, satisfied, and excited to work daily.

Create an environment where staff care!

6. Take action quickly

Taking immediate actions to existing and possible issues and matters helps in avoiding bankruptcy. While solutions are not always quick to arrive at, having enough time to handle things allows a startup to adjust and develop plans. Also, this way, one can evade future repercussions that can affect the business. Finally, ensuring deliverables, fulfilling payables on time, and staying on track helps a startup survive, grow, and succeed.

Achieve Startup Success

Running a startup is both a challenging and rewarding process. While bankruptcy can arrive at almost any business, controlling expenses and debts, resettling contracts, making use of assets, and having an excellent workforce helps avoid it. Above all, taking immediate actions and ensuring products or services quality are both recipes for success.

Does bankruptcy clear divorce debt?

blogger / April 19, 2021

When a divorce happens, the spouses often have a divorce agreement, a marital settlement, or any contract of the sort. These types of arrangements mean financial responsibilities for the parties involved. That’s why it is a common sight to see bankruptcy happen not long after a divorce.

However, because bankruptcy means being excused of many of your debts, does this mean that you are also relieved of your divorce settlement? The answer is YES.

Any financial settlement enforced by the court can be jeopardized by bankruptcy. Divorce is no different. You can discharge your separation agreements by filing for a Bankruptcy Chapter. There are two of them, Chapter 7 and Chapter 13.

Choose Chapter 13

Here’s why.

Without a unique argument, which is mostly very challenging to have, Chapter 7 will not pardon you of any dissolution-related debts.

On the other hand, Chapter 13 bankruptcy, also referred to as a wage earner’s plan doesn’t ask for that. And, it covers various types of debts.

Responsibilities That Will Remain

Even with all its perks, Chapter 13 doesn’t free you from all of your obligations. Here two of the most common responsibilities you can’t escape from.

Child Support

Most of your fiscal responsibilities as a former spouse may go away, but your accountability as a parent stays. Child support is a priority debt that can’t be diminished.

Alimony

Alimony, the financial support that the court orders a person to provide for their spouse after a divorce will also remain. Any debt in the nature of support, maintenance, or alimony is excepted from discharge.

Bankruptcy Validity

Just like all cases, the court needs to make sure your bankruptcy is valid before they approve of it. Do not abuse the function of Chapter 13 bankruptcy. Because if you do, the court will cancel your case. This will consequently allow your former spouse to make his or her claims.

How does bankruptcy stay on your credit report?

blogger / March 11, 2021

Being bankrupt is such a mess and a hassle for an ordinary person like you. Bankruptcy is caused by the non-payment of debts of an individual or entity to their lenders or official receivers. The debtors filed a relief in some or most of their unpaid or unsettled debt.

You are also wondering if how long does bankruptcy stays on your credit report. You are worried that if you don’t pay your debts on time, you will not lend again or apply for mortgages and other related matters. Sometimes, your new employer or new landlord will ask for your credit profile to know if you can pay. In the United Kingdom, your bankruptcy records will show up to 6 years. Although, for usual circumstances, your history will stay in your profile for 12 months after you have correctly settled your unpaid dues. Your lenders will take you to court if you are unable to determine your debt, and they will require you to pay it, therefore, prolonging your bankruptcy record in your credit profile

How long does bankruptcy stay on your credit report.

After 12 months of bankruptcy

In the United Kingdom, particularly in England, Wales, and Northern Ireland, your lender will let you pay for 12 months to settle your dues. During these months, you are restricted from borrowing and give ample time to pay. After paying for 12 months, your lender will discharge you from bankruptcy, and therefore, your record is removed from your profile. Although, you take note that you should be honest about your previous financial history as some companies require you to disclose your current financial situations.

After 15 months of bankruptcy

If you are dishonest with your financial statements, your lender or official receiver will take you to court to have you included in the Individual Insolvency Register (IIR). IIR is the list of bankruptcy restrictions and debt relief register in the UK, which will let you pay your dues after 15 months from your date of bankruptcy.

After 27 months of bankruptcy

If you cannot pay your dues after 27 months of bankruptcy, your lender will put more restrictions on you. They will put up your property for sale, and worse, they will decide more on what to do with your property every after nine months should you continue to break their rules on payment.

After six years of bankruptcy

Dishonesty and breaking your lender’s rules will not do you good. After six years of non-settlement of your dues, your lender will apply for Bankruptcy Registration Undertaking (BRU). BRU is an order where the lender will further give restrictions to you for two to 15 years, depending on the severity of your disobedience to your lender.

Your bankruptcy records will stay in your credit report for 12 months up to 6 years, depending on the severity of your actions to your lenders or official receivers. You should settle your debts with your lender within 12 months of your bankruptcy so you will be discharged after. Therefore, less hassle and worry for you should you decide to borrow money again.

Spanish Inheritance Tax – 5 Things You Need to Know

blogger / February 19, 2021

Authored by E&G Solicitors in Spain

Inheritance tax in Spain can be relatively complex compared to inheritance tax in the UK. There are some fundamental differences that are set out below. In addition, the nil-rate band and various other deductions vary depending upon the location of the assets in Spain.

Hence if you are inheriting assets in Spain it is recommended that you seek expert Spanish legal advice at an early stage in order to avoid problems in the future.

1. Current Spanish Inheritance tax rates

Depending upon where in Spain the property of the deceased is located, Spanish inheritance tax rates will vary and the total amount of inheritance tax payable will depend upon the reductions available and the relationship of the beneficiary to the deceased.

2. Inheritance Tax in Spain – How does it work?

Beneficiaries closely related to the deceased may benefit from a nil rate band. That means that if the share of the estate they inherit is below the nil rate band, they will pay no inheritance tax in Spain.

If inheritance tax is payable, the rate of tax depends upon the value of the assets to be inherited. The higher the value of the assets, the higher the rate of taxation.

In addition, each of the 17 autonomous communities in Spain are entitled to offer further reductions to the inheritance tax payable. Many do.

3. Inheritance Tax in Spain – Jointly Owned Property

When a property is jointly owned by two people in equal shares, a 50% share of the property will not pass automatically to the surviving owner under any circumstances. Instead it will always pass according to the will of the deceased, or failing that according to the applicable intestacy rules.

Upon the death of one owner the administration of the estate of the deceased must be completed before the surviving owner can sell, transfer or mortgage the property.

When the acceptance of inheritance is completed it may be that there is some inheritance tax to pay in Spain. In the vast majority of cases a surviving spouse or a child will pay no Spanish inheritance tax, or a very small amount, as a result of the available nil rate band.

Because of this situation a number of companies exist purporting to solve this problem by advising you to form a company. Please read our article on the subject to find out why this approach is not recommended.

4. Inheritance Tax in Spain – Brexit

Notwithstanding that the UK has left the EU, the rules regarding the imposition of inheritance tax have changed in Spain to such an extent that Brexit does not affect at all the amount of inheritance tax payable by those resident in the UK, as everyone inheriting in Spain, no matter their nationality or country of residence, is now subject to to the same rules as those resident in Spain.

5. How can Spanish inheritance tax be minimised?

When it comes to calculating the inheritance tax payable in Spain each beneficiary benefits from a nil rate band. That means that if the share of the estate they inherit is below the nil rate band, they will pay no inheritance tax in Spain.

What Is the Downside of Filing For Bankruptcy?

blogger / February 3, 2021

Filing for bankruptcy can help you discharge your debts and will produce an automatic stay against creditors. Some of your debts will also be written off after your bankruptcy is discharged.

But there are problems that come with filing for bankruptcy. Here are a few of the more prominent concerns to note before filing:

You could lose various assets in court. A bankruptcy court can seize assets like a car or a house. The court could sell these items to pay off your creditors, especially if they are valuable enough.
It may be difficult for you to obtain a loan, a mortgage, or a credit card after declaring bankruptcy. Your credit score will experience a substantial hit.
You might also struggle to find a job or a new home. Employers and landlords might notice a bankruptcy in your name and will ask about the situation at hand. These people may find you irresponsible, reducing your risk of being accepted as a tenant or landing a new work position.
You cannot discharge all your debts through bankruptcy. You cannot discharge student loans, alimony, child support, or any criminal restitution charges.
Your bankruptcy will stay on your credit report for years. It can remain for at least six years in most cases. The timeframe will vary by state or country, but it can be extensive.
The only financial services or products you will qualify for will be more expensive ones. You can find unsecured credit cards and other items that can help you rebuild your credit. But these often come with exorbitant fees and lofty interest rates.
Your bankruptcy will be disclosed to the public as part of your record. You may request a court order to avoid releasing your address data if you are concerned about being a victim of violence. You’d have to provide proof of your concern in this situation.