Your sponsor licence is not transferable and what happens to your licence when there is a change in your company ownership will depend on various factors. In this blog, we will briefly discuss how this change affects your licence.
A change of ownership can occur in multiple ways, when:
- there is a change in direct ownership
- you sell all or part of, or the controlling number of shares in, your organisation
- you are partly or wholly taken over by another organisation
- you are splitting out to form new organisations
Change in Ownership:
There is a change in direct ownership of your organisation or business if either of the following occurs:
- the company is sold as a going concern, or
- a share sale results in the controlling number of shares being transferred to a new owner.
In these circumstances, your sponsor licence will either be revoked or, if the sponsored workers have transferred to another sponsor’s licence, made dormant. This is because a sponsor licence cannot simply be transferred to the new owner, be it a new company or a new person who now has the controlling number of shares in your company.
Change in controlling number of shares: If the change in your company results in the controlling number of shares being transferred to a new person, you must report this to the Home Office and make a new application for a sponsor licence within 20 working days of this change taking place. Your sponsored workers can be moved to the new licence, when granted, without having to make a change of employment application.
Mergers and takeovers:
If the change is as a result of a merger or takeover, the process you must follow will depend on whether you have completely taken over another organisation or if you are being completely taken over by another organisation.
1. You have completely taken over another organisation: If the other organisation’s sponsored workers are moving to you as a result of a merger or takeover, you must apply for a sponsor licence if you do not have one already. If you already have a licence, you must report the change via SMS within 20 working days of the change taking place. The report must include details of any workers you have accepted sponsorship responsibility for.
2. You are being completely taken over by another organisation: If your sponsored workers are moving to the new organisation as a result of the merger or takeover, the new organisation must apply for a new sponsor licence, if they do not already have one, within 20 working days of the change taking place. You must report the change via your SMS account including details of all of your sponsored workers who will be moving to the new organisation within 20 working days of the change taking place.
3. Partial takeovers or de-mergers: If you are partially taken over, or if you are splitting out to form one or more new organisations, and some of your sponsored workers will be moved to a new organisation under TUPE or similar protection, the action you must take will depend on whether you are the new sponsor, or if you are the old sponsor and you are retaining any sponsored workers.
How Gherson can assist
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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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