When the structure of your business is changing, be that through mergers, acquisitions or takeovers, it is important to consider the ramifications for your sponsor licence.
What are Sponsor Licences
The sponsor licence is a permit granted by the UK Home Office, thereby authorising an organisation to employ individuals from outside the UK. However, some foreign employees do not require sponsorship, such as those with settled or pre-settled status under the EU Settlement Scheme or those with indefinite leave to remain in the UK.
The Triggering Factors for Reporting – What is the Timeline?
Any change in the controlling interest of a company, whether through a sale, purchase or takeover, triggers a reporting requirement and may trigger a new licence requirement. This also includes mergers, which combine two or more companies into a single entity, and takeovers, where one entity acquires control over another. Additionally, similar provisions are applicable for de-mergers, the division of a company into two or more separate entities, etc. Reports must be submitted to the Home Office within 20 working days of the change occurring. In some instances, a new licence application must be submitted within 20 working days as well. Failure to do so can lead to penalties or the loss of your sponsor licence.
Are Sponsor Licenses Transferrable?
Sponsor licences are not directly transferable between organisations. If the restructuring results in a change of ownership, the new entity will generally need to apply for a new sponsor licence. It is advisable to be prepared to apply for a new licence as soon as the restructuring takes place to avoid disruptions in the work of your sponsored employees.
The Impact of Restructuring on a Standalone Business
If a standalone business is sold, its sponsor licence may be revoked or rendered dormant. The new owner will need to apply for a new sponsor licence to continue sponsoring any existing sponsored workers. The impact on sponsored workers will depend on the specific circumstances of the restructuring outcome. In some cases, they may need to submit new visa applications and have a new Certificates of Sponsorship allocated.
Key Considerations
You must ensure that all right to work checks have been conducted correctly for all employees, including those acquired through the restructuring process. It is vital that you protect your sponsored workers’ rights throughout the restructuring process.
It is also recommended that you incorporate immigration planning into the restructuring process to minimise disruptions. Immigration compliance requirements can have an impact on your business operations.
Finally, timely reporting of changes to the Home Office is crucial to maintain your sponsor licence.
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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