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Company Merger or Change of name? Companies with same owners

Only for UK Tier 2 (Employer Sponsored) points system Tier 2

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dialectic
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Company Merger or Change of name? Companies with same owners

Post by dialectic » Wed Dec 30, 2015 12:32 pm

Hi everyone

I was hoping you could throw some light on this. I have read Paragraphs 13 of the sponsor guidance which relates Mergers, takeovers and similar changes *Page 42). And I have also read the flowchart and examples of Annex 8. But I would like to give more details and hope that the gurus could give their advice.

Here's the story:

I am currently being sponsored as a Tier 2 worker by company A. My boss owns and is the main director of the company.

My boss also owns and is the director of company B, which doesn't have a sponsor license.

Both companies A and B are of the same nature business wise. They are small companies that function in the same space. All the employees work under the same roof. Half of them work under contract for company A and the other half work under contract for company B.

Both companies ended up having the same clients and it has been decided that companies A and B should finally work as one entity. However it was decided that everything will function under the name of company B for branding purposes (a more recognisable name and so on).

Employees for company A will be now employees for company B, in the same workspace and doing exactly the same roles for the same clients as before.

I am the only sponsored Tier 2 worker.

So the question is whether the license could be retained instead of company B having to apply for one, as both companies have more or less the same owners, the job terms and conditions of the workers will remain intact and the only thing that would be changing is the name of the company.

I went through the flowchart of Annex 8 of the Sponsor guidance (page 156) and this seems to be the case. However, there are some other examples and it seems to be confusing, so any feedback or advice will be greatly appreciated.

Hope you guys are having a peaceful and fun Holiday.

Thanks a lot! :)
Attachments
screenshot_merger_workflow.jpg
Workflow... Does it look like this is the case?
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dialectic
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Posts: 129
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Re: Company Merger or Change of name? Companies with same ow

Post by dialectic » Sat Jan 02, 2016 11:03 am

Hi guys

Any insights on this?

Really appreciate your help

geriatrix
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Re: Company Merger or Change of name? Companies with same ow

Post by geriatrix » Sat Jan 02, 2016 11:12 am

dialectic wrote:Employees for company A will be now employees for company B,
Can only happen when company B is a licensed sponsor.
One of the fundamental change in your "terms and conditions of employment" is the employer, so how can you say that the T&Cs are the same. That would have been true if company A contiues to sponsor you even after merger. But that's not the case!

IMHO ...
Life isn't fair, but you can be!

dialectic
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Posts: 129
Joined: Tue Jun 03, 2014 1:15 pm

Re: Company Merger or Change of name? Companies with same ow

Post by dialectic » Sat Jan 02, 2016 12:05 pm

sushdmehta wrote:
dialectic wrote:Employees for company A will be now employees for company B,
Can only happen when company B is a licensed sponsor.
One of the fundamental change in your "terms and conditions of employment" is the employer, so how can you say that the T&Cs are the same. That would have been true if company A contiues to sponsor you even after merger. But that's not the case!

IMHO ...
Thanks a lot for the reply. Yes that makes sense. However, I have doubts about it as what seems to be relevant according to the flowchart is the company's ownership which won't be really affected. So, if the company was only changing the name would they have to apply for a license too?

If the merger took place and the company retained their original name, would that mean reapplying for a license as well?

Thanks :)

dialectic
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Posts: 129
Joined: Tue Jun 03, 2014 1:15 pm

Re: Company Merger or Change of name? Companies with same ow

Post by dialectic » Wed Mar 16, 2016 9:36 pm

Hi everyone.

As the OP of this, I wanted to ask a couple of more questions regarding this as the company reestructuring is getting closer.

The situation is:

- Company A and company B have the same owners/directors and function at the same premises.

- I am currently working under company A which is a licensed sponsor

- Company A will go under Solvent Liquidation / MVL - Members voluntary liquidation and its assets (Equipment, clients and employees) are being sold and/or transfered to company B, which is taking over company A

- Company B is in the process of applying for a license in order to have me transferred (I am the only sponsored tier 2 employee)

- After company B gets the license Company A will use the SMS to inform about the change of circumstances and me being transferred to company B (same job title, duties, responsibilities SoC code, premises, etc.)

Questions:

1. What happens next? Should my CoS info appear on company’s B SMS after this is done?

2. I understand that UKVI may ask for other documents during this transfer process. What are they likely to ask for?

I really appreciate your help on this

Frontier Mole
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Re: Company Merger or Change of name? Companies with same ow

Post by Frontier Mole » Thu Mar 17, 2016 9:03 am

When a company becomes insolvent / goes in liquidation a different set of rules comes into play. So if the liquidation takes place it is not a merger or a takeover.
For your own purposes you want to be transferred under TUPE, if this does not apply then it becomes really messy.

On a takeover / merger your visa is assigned internally to the new company. It does not appear on SMS.

dialectic
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Posts: 129
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Re: Company Merger or Change of name? Companies with same ow

Post by dialectic » Thu Mar 17, 2016 10:20 am

Frontier Mole wrote:When a company becomes insolvent / goes in liquidation a different set of rules comes into play. So if the liquidation takes place it is not a merger or a takeover.
For your own purposes you want to be transferred under TUPE, if this does not apply then it becomes really messy.

On a takeover / merger your visa is assigned internally to the new company. It does not appear on SMS.
Thanks for your response Frontier Mole

This is what I'm concerned about. However. This is not a situation of insolvency. They are closing in a voluntary solvent scenario (MVL - members voluntary liquidation) a situation where you need to prove that you are solvent (done for logistic reasons as both companies have the same owners/directors). All the employees will be working under the new company (B). And main assets from company A have been sold to company B, apart from undertaking clients and . So I want to know whether there is a way / document that they may ask for in order to confirm that a transfer is being made...

I found this:

http://www.realbusinessrescue.co.uk/bus ... ancy-guide

"Since members voluntary liquidation is not considered an insolvency proceeding at all (it is actually by definition a solvent winding up process) there are only a couple of TUPE regulation sections that would apply. Section 8 of TUPE would not be applicable at all while Sections 4 and 7 would apply if there is a relevant transfer of assets."


Sections 4 and 7 refer to the protection of employees and their effective transfer.

http://www.legislation.gov.uk/uksi/2006 ... e/data.pdf



So the question is. What sort of documents could they ask for in order to confirm that an undertaking of assets from company A to B has been made?

Has anyone been in a similar situation? I know that there has been at least a partial takeover, but I need to be able to advise my employers on what documents they must have ready in order to avoid any messy situations as Frontier Mole mentioned

Thanks a lot

dialectic
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Posts: 129
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Re: Company Merger or Change of name? Companies with same ow

Post by dialectic » Thu Mar 17, 2016 5:53 pm

Sorry, Anyone gone through a similar experience?

Frontier Mole
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Re: Company Merger or Change of name? Companies with same ow

Post by Frontier Mole » Fri Mar 18, 2016 10:44 am

For the purposes of Tier 2 members voluntary or winding up is the same. Insolvency by any means causes the legal entity to cease. So quoting all the other stuff is of no consequence.

Bottom line - are you transferring over to the new company on TUPE If yes then as long as new company has applied for a licence within 28 days of the transfer all will be good.

You are overthinking the issue.....

dialectic
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Posts: 129
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Re: Company Merger or Change of name? Companies with same ow

Post by dialectic » Fri Mar 18, 2016 5:21 pm

Frontier Mole wrote:For the purposes of Tier 2 members voluntary or winding up is the same. Insolvency by any means causes the legal entity to cease. So quoting all the other stuff is of no consequence.

Bottom line - are you transferring over to the new company on TUPE If yes then as long as new company has applied for a licence within 28 days of the transfer all will be good.

You are overthinking the issue.....
Thanks for your reply Frontier Mole. I spoke to my bosses and basically they will follow the UKVI rules of informing of the change of circumstances and about the transfer. Everyone else (domestic employees) will be transfered under the same conditions of employment and nobody will be dismissed so apparently is pretty straightforward. So, my employers also think that I am overthinking the issue. Hopefully we will be able to continue without any problems from UKVI.

Thanks again

Frontier Mole
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Re: Company Merger or Change of name? Companies with same ow

Post by Frontier Mole » Sat Mar 19, 2016 3:15 am

I am sure it will be fine. It is not an uncommon instance and UKVI are used to dealing with it. You can expect about a 60% chance the new Sponosr to get a pre licence visit.
But don't worry about it if there is a visit. Your circumstances are unlikely to change. Your company appears to have it in hand and given their very proactive stance on the merger I really don't see an issue.
Good luck, not that I believe you need any :D

dialectic
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Re: Company Merger or Change of name? Companies with same ow

Post by dialectic » Sat Mar 19, 2016 5:08 am

Frontier Mole wrote:I am sure it will be fine. It is not an uncommon instance and UKVI are used to dealing with it. You can expect about a 60% chance the new Sponosr to get a pre licence visit.
But don't worry about it if there is a visit. Your circumstances are unlikely to change. Your company appears to have it in hand and given their very proactive stance on the merger I really don't see an issue.
Good luck, not that I believe you need any :D
Thank you Frontier Mole. I really appreciate your words :D

dialectic
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Posts: 129
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Re: Company Merger or Change of name? Companies with same ow

Post by dialectic » Wed Mar 23, 2016 4:31 pm

Hi guys

Didn't want to bother with this thread too much. However, I just wanted to ask:

An application for the License of company B was sent on the 18th. Both Companies A and B are waiting for the approval of this license before doing the actual transfer (company A logging into the SMS and reporting my transfer and company B writing to UKVI and reporting that they will take me and be responsible for me). I am just worried about the 20 day rule. As I mentioned, both companies are on the same premises and logistically it could be said that they're both integrated... Is it a good idea to wait for the license for company B to be approved before reporting/informing/transferring?

Are there any situations where employees are transferred gradually according to the transfer process / projects on company A that need completion / etc. ?

Thanks again

dialectic
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Posts: 129
Joined: Tue Jun 03, 2014 1:15 pm

Re: Company Merger or Change of name? Companies with same ow

Post by dialectic » Thu Mar 24, 2016 8:02 am

dialectic wrote:Hi guys

Didn't want to bother with this thread too much. However, I just wanted to ask:

An application for the License of company B was sent on the 18th. Both Companies A and B are waiting for the approval of this license before doing the actual transfer (company A logging into the SMS and reporting my transfer and company B writing to UKVI and reporting that they will take me and be responsible for me). I am just worried about the 20 day rule. As I mentioned, both companies are on the same premises and logistically it could be said that they're both integrated... Is it a good idea to wait for the license for company B to be approved before reporting/informing/transferring?

Are there any situations where employees are transferred gradually according to the transfer process / projects on company A that need completion / etc. ?

Thanks again
Sorry guys. If anyone has insights on this. Just want to be able to have an idea before the Easter chaos.

Thanks :)

dialectic
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Posts: 129
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Re: Company Merger or Change of name? Companies with same ow

Post by dialectic » Tue Mar 29, 2016 1:57 pm

Hi guys

Things are getting a bit trickier here and I need urgent help.

As you know the info regarding COMPANY A and COMPANY B. Company B received a letter from UKVI stating that the application was rejected. As follows
Your application for a tier 2 sponsor license was rejected for the following reason:

- You have not supplied the mandatory documentation listed in appendix A , which is required for a tier 2 General license application. In this case, you have not provided information regarding your business and requested CoS, as listed on page 3 of appendix A. Please refer to appendix A of the Policy Guidance for tier 2 and Tier 5 sponsors for full details of the mandatory documentation required.
Then they go about explaining how copies must be certified and how...

The following documents were submitted:

1. Certificate of VAT registration; and/or latest VAT return confirming VAT registration number if turnover in excess of £64,000

2. Latest Corporate/Business Bank Statement

3. Evidence of Registration with HM Revenue & Customs (HMRC) as an employer to pay PAYE & National Insurance. Provide proof of PAYE Reference Number & Accounts Office Reference Number.

4. Latest Notice to file a Company Tax Return - CT603 & Company Tax Return - CT600 (Both parts must be supplied).

All these copies where certified by a solicitor. Except the TAX return CT600 for which no originals can be acquired as it is something that companies do online and they print. I was informed that these same documents were sent in the exact same fashion by COMPANY A when their license got approved. But I want to make sure these are ok in order to reapply. Are they OK? should COMPANY B submit something else instead?

Because it seems like the only reason they rejected the application was because the company didn't provide any information regarding the business as specified on page 3 of Appendix A. I believe this is a recent requirement and the company directors didn't know about it.

Page three of Appendix A states the following. I would like to know if the company should state that the license is in order to transfer me as a sponsored worker as both companies are consolidating:

https://www.gov.uk/government/uploads/s ... 5_v1_0.pdf

For Tier 2 (General) and Tier 2 (Minister of Religion) applications you must provide the following information as well as the information
from the following tables, or your application will be rejected. Tier 4 and Tier 5 sponsors may omit this section and go straight to the
tables.

Tell us about you:
1. Why are you applying for a sponsor licence?
In order to transfer a sponsor worker from our sister COMPANY A as we are consolidating into one?

2. What sector do you operate in?

3. What are your opening/operating hours during the week?
9am - 6PM monday to friday

4. Please supply an up to date hierarchy chart detailing any owner, director, and board members. If you have 50 employees or fewer please also list all the people involved with the day-to-day running of your business.
The company has around 10 employees. That means listing name and job title of everyone?

Tell us about the posts you wish to fill:
5. What post(s) do you intend to assign a CoS for? This information must include:
a. The job title(s) and SOC code(s);
b. The duties of each post;
c. The salary you would guarantee for each post. if it were vacant today;
d. The skill, experience and qualifications required for each post.
Do they need to put my information here? As I'm being transferred I understand there's no need for CoS, but would giving this info help?


6. Please indicate which posts are currently vacant and for which you intend to assign a CoS. If you have identified someone already that you
wish to employ via the sponsorship system, please provide evidence of how you identified this person. If you identified this person as a
result of a recruitment process you should include copies of advertisements placed to recruit for the post, details of any applicants and why
they were not suitable for the post of offer. Please confirm whether the person is already working for you.
Do they need to put my information here? The company wanted to get the license before transferring me. In case of a transfer like this do they need to explain how the RLMT was done etc.?

7. If you have not advertised the post and the migrant is not currently working for you, please confirm how you identified that this person was
the most suitable for the role.


8. If you have already identified a person and intend to assign a CoS shortly (this will include migrants already working for you), please provide
the following details of the person:
a. Migrant name.
b. Date of Birth.
c. Nationality.
d. Current immigration status.
e. Current job title and duties
f. 3 x Monthly Payslips (if applicable)

9. Security is important to us. Please provide confirmation that the email address supplied with your application is secure and can only be
accessed by the Authorising Officer (This is the one person who will be ultimately responsible for your recruitment and for ensuing that all of
your sponsor duties are met)

10.Please also provide a landline telephone number, if you have one. If you do not have a landline please indicate this in your response.
Last question: Should my employers inform right away about the companies consolidating (Using company A's existing SMS) and stating that I need to be transferred on company B's application or is it better to wait for company B to get the license before reporting?


I am really sorry about being so specific when it comes to the questions. The application has been rejected and I'm really stressed about the companies doing this on time and making sure company B doesn't get rejected again.

I really appreciate your help

dialectic
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Posts: 129
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Re: Company Merger or Change of name? Companies with same ow

Post by dialectic » Tue Mar 29, 2016 5:03 pm

anyone? pls

dialectic
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Re: Company Merger or Change of name? Companies with same ow

Post by dialectic » Wed Mar 30, 2016 8:53 am

Hi everyone

I apologise. I realise my last post was too extensive. I am a bit stressed by this and want to advise my employers properly.

The license for company B was rejected, as a document was missing, in this case a cover letter with information about the company (Page 3 Appendix A)

https://www.gov.uk/government/uploads/s ... 5_v1_0.pdf

In order to reapply

1. Should they state on the application that the reason for applying for the license is to transfer me from company A to B as both companies are being consolidated into one. The first question on pag 3 of Appendix A is "why are you applying for a license?"

2. Should Company A report my transfer right away using SMS while they wait for Company B's license to be approved? or is it better to wait until company B has the license approved in order to avoid issues?

Thanks a lot for your help

Frontier Mole
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Re: Company Merger or Change of name? Companies with same ow

Post by Frontier Mole » Wed Mar 30, 2016 9:19 am

Question 1- yes state the reason as TUPE merger etc

Question 2 - do NOT do anything on Company A SMS until Company B is licensed. UKVI will perform the internal SMS move on their side of the fence.

dialectic
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Re: Company Merger or Change of name? Companies with same ow

Post by dialectic » Wed Mar 30, 2016 9:25 am

Frontier Mole, thank you so much for your help.

I will advice the company to give those reasons and to give detailed info about me including roles, salary, etc.

Hopefully things will go without issues this time around. Will keep you posted.

Thanks again. Your suggestions have been a great help :)

dialectic
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Posts: 129
Joined: Tue Jun 03, 2014 1:15 pm

Re: Company Merger or Change of name? Companies with same ow

Post by dialectic » Wed Mar 30, 2016 11:27 am

Frontier Mole wrote:Question 1- yes state the reason as TUPE merger etc

Question 2 - do NOT do anything on Company A SMS until Company B is licensed. UKVI will perform the internal SMS move on their side of the fence.
Hello again. I have a (hopefully) last question:

Would it be wise to mention on the application cover letter that this is a reapplication and that the previous one was rejected? There is a Sponsor License application reference number on the rejection letter that UKVI sent. It is not clear whether it would be better not to mention that the company was rejected because a document was missing (?)

Thanks again

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