What to consider from the Sponsor Licence perspective?

During a complex company restructuring process, any impact on the business’s ability to sponsor foreign workers may be accidentally overlooked. However, it is important to be aware of your responsibilities at this time.

Sponsor licences are directly tied to the organisations to which they were originally granted. It means that a sponsor licence cannot be transferred to another (including newly incorporated) organisation during any type of restructuring, i.e. mergers, acquisitions or changes in ownership. Holding a sponsor license requires your organisation to uphold certain responsibilities of due diligence and communication to the Home Office regarding your employment of sponsored workers. Any changes in the structure of your organisation that may affect your sponsored workers’ terms and conditions of employment, must be reported within 20 working days of the change.

Instances in which you will be required to notify the Home Office of changes include, but are not limited to, changes to the business’s name, involvement in a merger or takeover, insolvency proceedings and substantial changes to the nature of the business.

Some cases may necessitate an application for a new sponsor license. This is most common where there is a change affecting the direct ownership of the organisation, whether through sale of the business as a going concern, or through the replacement of the majority shareholder. If the new owners intend to continue employing the existing sponsored workers or want to employ sponsored workers in the future, they will need to apply for a new sponsor license. To avoid disruption to your sponsored workers’ employment it is best to be ready to apply for the new license as soon as the restructuring occurs.

The Home Office can exercise discretion in some cases of restructuring, offering case-specific concessions, where the business can demonstrate that the beneficial owner has not changed. In cases that allow the existing sponsor license to be retained, all responsibilities as a sponsor license holder must be continued without interruption.

It is important to understand the potential of impact on your sponsor license in any instances of restructuring. Regular reviews of the business’s corporate structure and how your sponsor licenses are held within this structure, training your staff involved in sponsor license administration in the implications of restructuring and maintaining internal communication channels with the business’ general counsel or other staff involved in corporate management, can all ensure continued eligibility to sponsor workers and prevent penalties for potential breaches. 

Open communication with both the Home Office and any sponsored employees should be established at an early stage and maintained throughout all corporate transactions. It is recommended to seek specific immigration advice on the implications of a particular corporate transaction, both in terms of sponsor licence compliance and sponsorship of individual workers.

How Gherson can assist

Gherson’s Immigration Team are highly experienced in advising on UK visa matters. If you have any questions arising from this blog, please do not hesitate to contact us for advice, send us an e-mail, or, alternatively, follow us on X, Facebook, Instagram, or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

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