TUPE on a share sale? Surely some mistake
When a buyer wants to acquire an existing business, it has two basic options: it can either acquire the shares in the company that operates that business or it can acquire the individual assets that comprise that business directly from the company that currently operates it. In both cases, the commercial effect of the acquisition is similar: the buyer takes over the business and its operation. Legally, however, the two transactions are quite distinct, particularly for any affected employees.
On a share sale, it is the ownership of the entity operating the business, rather than the ownership of the business itself, that changes. Assets continue to be owned by the target company, contracts continue in the name of that company and, crucially, there is no change of employer for the target’s employees.
On an asset sale, however, individual assets and contracts, including employment contracts, transfer into the name of the buyer. From completion, therefore, the target’s employees will have a new employer — the buyer. The law has evolved to protect employees in this situation and the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) ensure that the target’s obligations and liabilities in respect of the employment contracts are transferred to the buyer…
Click on the link below to read the rest of the Gateley briefing.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from The Lawyer
Briefings from Gateley Plc
With effect from 1 October 2015, the right to take a short service refund from a defined contribution occupational scheme will be abolished.
Being sued is bad, but it’s worse if you are running up substantial costs in defending a claim while in fear that the claimant may not have the means to compensate you if you win.
Analysis from The Lawyer
Gateley bigshots see personal wealth soar on flotation, but face penalties for early exit .
Gateley is to float on the London Stock Exchange, becoming the first UK firm to list itself as a public limited company. But why would a firm would look to float, and what it could mean for the industry?