UK: Professional Practices News - Winter 2013/14

Confidence Growing As Firms Recover
Last Updated: 15 January 2014
Article by Smith & Williamson

FOREWORD

New year, new Landscape

By Giles Murphy

While the positive signs of economic recovery will be welcomed by all professional practice firms, the focus of attention by HMRC will not.

Firms with service companies, salaried members and/or corporate members will all be rapidly reviewing their structures to ensure they comply with new onerous requirements or, alternatively, considering how their structures should change. This briefing sets out some of the issues to be faced and the potential consequences.

For a significant number of these firms changes will need to be implemented quickly and, since they will most probably affect the relationship between the firm and its members, the leadership skills of all management boards will be tested.

This issue of Professional practices news also covers changes to accounting, pensions and, perhaps the possibility of a tax refund. It also continues our theme of focusing on a foreign jurisdiction where we are increasingly seeing professional practice firms set up overseas offices. This time we focus on Australia, but with no mention of any cricket!

MAJOR CHANGES TO PARTNERSHIP TAXATION

By Pamela Sayers

Firms need to take urgent action following government confirmation of imminent new tax rules.

Apart from the introduction of Limited Liability Partnerships (LLPs) in 2000 there have been few changes to partnership taxation for many years. However, last year HMRC became concerned that partnerships and LLPs were being used in ways that it did not like and it launched a consultation focusing on two main areas of concern. The Government has now published detailed draft legislation effective from 6 April 2014 which will change the landscape considerably for many partnerships.

Salaried partners

The first area of HMRC's concern involved the categorisation of individual members of an LLP between those who are self-employed and those who will in future be deemed to be employees for tax purposes.

There will be three tests relating to members. If a member fails all three tests they will be a "salaried member" and treated as employed. The first test asks whether over 80% of the partner's drawings is fixed, irrespective of the performance of the business. If so, the test is failed.

The second test asks whether the partner has significant influence over the management of the LLP. Taking the example of a large law firm, it is likely that this will apply to a relatively small group of partners who sit on the management committee.

The third test is whether the partner has contributed capital to the LLP equivalent of at least 25% of their expected fixed earnings. So if partner A receives a 'salary' of £120,000 then they would need to have introduced capital of £30,000 in order to meet this test.

Partners will only be regarded as salaried if they fail all three tests. However there are anti-avoidance provisions to prevent certain arrangements being put in place specifically so that an individual will not be treated as a salaried partner.

There are no special rules for new or retiring partners and all LLPs will need to review their existing arrangements as soon as practicably possible.

'Mixed' partnerships

The second area of HMRC's concern involves the way in which profits and losses are allocated in a case where a partnership (LLP or general) has individual members/partners and non-individual (corporate) members.

Where profit has been diverted from an individual member to the corporate member in specified circumstances, the profits of the LLP will be reallocated to the individual members who will be taxed on them.

The legislation applies where profits are allocated to a corporate member and two conditions are met.

The first test asks whether "it is reasonable to suppose" that amounts representing an individual member's deferred profit are included in the corporate's profit share so that the individual's tax liability is lower than it would otherwise have been.

There are three aspects to the second test and all three must be met to be within the condition.

  • The corporate's profit share exceeds the commercial return on its capital contribution.
  • The individual member has the "power to enjoy" the profit allocated to the corporate member.
  • It is reasonable to suppose that the corporate member's profit share is attributable to the individual member's "power to enjoy" and the individual member's tax is consequently lower.

Some comfort may be drawn from HMRC's statement that "The legislation does not apply to mixed membership partnerships in which individual and non-individual partners are genuinely acting at arms' length".

All 'mixed' partnerships will need to review their arrangements urgently.

CONFIDENCE GROWING AS FIRMS RECOVER - INSIGHTS FROM OUR LATEST ANNUAL LAW FIRM SURVEY

By Giles Murphy

Our 19th annual survey of the legal sector explores the latest issues and trends affecting law firms and the legal market.

This year, 102 of the UK's top 250 law firms took part in Smith & Williamson's annual survey, including 14 of the top 30 and 46 of the top 100 firms. Business confidence

Optimism in the legal sector is the most positive it has been since 2007 according to the results of our latest survey. 82% of respondents are confident about the coming year, up from 61% last year. Smaller firms, with 25 partners or fewer, were the most confident. Signs of renewed growth in the UK economy appear to be the key factor behind the results, fuelling hopes that a more solid recovery may be on the way.

Responding to the business climate

Despite the renewed confidence among firms, securing a sufficient share of the work out there is proving increasingly tough, with 81% reporting that the environment has become more competitive in the past year. Larger firms are experiencing the highest levels of competition, with more than nine in ten practices with 100+ partners reporting an increase in competitive pressure.

Many firms (39%) have set up a new service line in the last year, while 24% expect to do so in the next 12 months. This, in addition to the high number of lateral hires, suggests a focus on cross-selling services to existing clients, rather than on winning new business. It also indicates a need for an increasing level of diversification that law firms have traditionally struggled to achieve. Among other measures taken by respondent firms in the past year, 18% have sub-let office space, 15% have de-equitised partners, 14% have opened a new office in the UK, 12% have opened an overseas office and 11% have centralised functions. A third of firms surveyed are considering a merger with another firm, while respondents from a number of larger firms are anticipating opportunities for overseas expansion in the year ahead.

Funding the practice

Reducing lock-up is widely seen as a key means to help improve firms' finances by our survey respondents, with five in ten firms thinking it likely they will reduce lockup in the next year, while a further four in ten see this as possible. Why do so many firms believe that this source of funding will come good in the next year when it has alluded them over the last five?

Merger activity

Almost a fifth (18%) of surveyed firms expect to merge with another business in the next year, while a further 10% are seeking a merger partner. This is broadly consistent across all sizes of firms responding to our survey and could potentially have a significant impact on the shape of the legal market.

Where firms have been involved in merger discussions, they say that these typically last for more than six months. Where mergers have failed, too many participants appear to reach this conclusion too slowly (only 23% in less than three months). This underlines the importance of identifying key merger issues early on and resolving any deal-breakers swiftly.

Future challenges

Pressure on fees ranked as the greatest challenge for respondents, with half of all practices citing this as an issue. This is particularly severe among larger firms – three quarters of practices with 100+ partners say pressure on fees is a concern, while only a third of firms with 25 or fewer partners consider it an issue. Maintaining profitability and the ability to win new work were further issues of particular concern; the latter appears to be giving greatest concern to firms in our sample group with 26-49 partners.

The Legal Services Act is clearly set to meet its objective of increasing competition in the legal services marketplace, according to our survey, with almost nine in ten respondents anticipating greater levels of competition as a result. While most accept that the retail end of the legal services market will be affected most, our results suggest there is considerable nervousness around competition among the top 200 law firms.

Tax threat to LLPs

Only half of firms are reviewing their structure in light of the HMRC consultation on the taxation of partners, due to take effect from 6 April 2014. However, in light of the tougher than expected proposals (see p.3) we expect that number to increase significantly.

Pension auto-enrolment – ready or not?

Worryingly, more than half (56%) of our survey respondents report that they have yet to contract with an insurance provider for pensions auto-enrolment, and over three-quarters (78%) have not yet considered their options, while nearly half (47%) do not have an auto-enrolment project team or plan in place. Between 2012 and 2017, every employer is legally bound to designate a qualifying workplace pension scheme into which it will automatically enroll all of its qualifying employees and make contributions on their behalf. The costs of setting up a scheme from scratch or ensuring that a pre-existing one is compliant are now starting to rise so if you have yet to take action, our advice is to do it now.

REFLECTING A CHANGING MARKETPLACE - A LOOK BACK AT A BUSY YEAR FOR SMITH & WILLIAMSON

Our work with a number of firms over the past 12 months reflects some of the key trends in the professional services marketplace. Here are just a few examples.

Slater & Gordon accelerates UK consolidation

Having acquired Russell Jones & Walker (RJW) in 2012, the quoted Australian law firm Slater & Gordon unveiled five further UK acquisitions in 2013.

Slater & Gordon's investment in a UK presence has provided a platform to take advantage of the opportunities presented by changes in the UK legal services landscape.

In 2012, Smith & Williamson advised the partners of RJW on the £54m disposal of their business to form the basis of Slater & Gordon's UK growth strategy. In 2013, we provided Slater & Gordon with lead advisory corporate finance and targeted financial and tax due diligence on further acquisitions.

Following a substantial equity fundraising on the Australian Stock Exchange in May 2013 to accelerate its UK expansion, Slater & Gordon has completed acquisitions of:

  • Manchester and London-based personal injury specialists Fentons for £32m
  • the personal injury practice of Taylor Vinters in East Anglia
  • Liverpool-based personal injury firm Goodmans Law
  • niche industrial disease firm John Pickering and Partners.

Most recently, Slater & Gordon announced the £33m acquisition of the personal legal services business of Pannone Solicitors. The transaction is expected to complete in February 2014.

This deal sees Slater & Gordon acquire some of Pannone's market-leading practice areas, including personal injury, clinical negligence, court of protection, family, private client and trust and probate, real estate, and regulatory and construction, as well as teams from the employment and dispute resolution group. Slater & Gordon's operations in the UK will increase by approximately 50% to a headcount of more than 1,200.

Neil Kinsella, head of Slater & Gordon UK said: "The acquisition of Pannone's personal legal services business will transform us into a significantly larger firm offering a broader range of legal services and allowing us to help more clients in their fight for justice. It is a vital step in our strategy for growth, bringing us closer to our aim of becoming the UK's leading law practice for everyday people."

Philip Quigley, head of transaction services at Smith & Williamson, said: "This was a challenging transaction from a financial due diligence perspective, given the need to split the personal and corporate businesses historically combined within Pannone. We are pleased that our collaborative and flexible approach helped give Slater & Gordon the informed perspective they needed for the deal to progress."

Andy Pedrette, corporate finance director at Smith & Williamson, said: "These deals in 2013 illustrate Slater & Gordon's attractiveness as a partner both for specialist consumer law firms and for mixed law firms looking to dispose of their consumer-focused activities, such as personal injury practices. As a publicly quoted company with a current market capitalisation of approximately £500m, Slater & Gordon's ability to offer its quoted shares in combination with cash consideration is an exciting ingredient for vendors. Investor support for Slater & Gordon and its UK acquisition strategy has seen its share price more than double since the announcement of its acquisition of RJW in 2012."

LLP conversions still in demand

Informed decisions on business structure

During the year we advised a number of firms on their corporate structure, including a partnership of engineers in the building services sector. Having discussed the advantages and disadvantages of the firm's current structure compared to others, our client agreed that an LLP vehicle would be the most appropriate.

Smith & Williamson advised the firm on the issues surrounding the presentation of LLP accounts compared to general partnership accounts, the differing accounting treatments involved and the implications of reporting for an LLP under UK generally accepted accounting practice. The most significant issue for our client was retirement annuities for retired and current partners which were not recognised on the partnership balance sheet, but would have to be reflected on the LLP balance sheet. We helped the firm to understand the issues by preparing a report and an annotated set of pro-forma LLP accounts which highlighted the differences, providing explanations and reconciliations between the two sets of accounts.

Our report and pro-forma LLP accounts ultimately enabled the firm to make an informed decision on the appropriate structure for the business for the future.

Consolidation continues apace

With the expectation of further consolidation in the legal sector, we have been increasingly asked to advise firms on potential mergers.

In one example from last year, Smith & Williamson advised a regional law firm looking to merge with another legal practice. Our initial advice centred around understanding the rationale for the combination. In our experience, too many initial merger conversations are driven by a belief that 'bigger is better' and the expectation that some duplicated costs can be taken out of the business. Given the risks and challenges involved in any merger, a lack of clear strategic imperative can often mean that discussions never reach fruition.

In this case, the strategic fit was good and discussions quickly turned to structuring. Essentially this came down to a choice between a genuine merger, where the two businesses are aggregated; or one firm acquiring the staff and clients of the other firm in a 'mass lateral hire' – as is increasingly the case where there is a dominant party. Having weighed up the pros and cons, our client chose a genuine merger as the preferred route.

This merger demonstrated the critical importance of understanding the likely future structure of the firm at an early stage. This helps to determine the scope of any due diligence required, the tax planning required around the combination and, ultimately, will have a major bearing on post-transaction integration.

Smith & Williamson advised on structuring the transaction, cash flow implications and liaised with HMRC to obtain appropriate clearances and agree an action plan for the post-transaction phase. In our experience, a successful merger process requires focus, dedication and experience of similar transactions, but the merger itself is just the beginning – the hard work really starts at the post-transaction integration phase and it is only here that the success of a merger can truly be judged.

THE RIGHT SORT OF ECONOMIC RECOVERY?

By Christopher Bates

Chris Bates assesses the UK's growth prospects as the economy appears to be gaining traction.

Mark Carney's second inflation report as governor of the Bank of England delivered an upbeat message on the progress of the economic recovery. The bank revised its growth forecasts for this year up to 1.6% from 1.4%, and for growth next year to come in at 2.8%, up from 2.5% in August. October and November's purchase managers' index (PMI) services index suggested growth in the fourth quarter of 2013 could be as high as 1.5% but we wait to see whether this momentum can be maintained. November's strong manufacturing PMI, which rose to its highest level for over two and a half years, suggests that the recovery could well be more broad-based.

Housing market revival

It is clear however, that the housing market revival is playing a significant role in the economic recovery. House building alone contributed around a fifth of the 1% rise in output in the first half of 2013, despite the sector accounting for less than 4% of overall GDP. While Mr Carney says he sees no current risk in the housing market, by ending the Funding for Lending scheme early the bank is clearly cautious of any excess froth forming, particularly in London and the south east. Importantly, the scheme will be left open to SMEs where lending still remains weak. Sharp increases in utility prices are a threat to an improvement in disposable incomes, but with real wage growth still in negative territory, cost-push inflationary pressures are likely to remain muted and overall inflation to remain relatively subdued.

Interest rates and the unemployment threshold

The key change in the Bank of England's inflation report was a notable downward revision to the forecast for unemployment. The monetary policy committee (MPC) now sees the 7% threshold being reached by the end of 2015, compared to its earlier forecast of the third quarter of 2016. This abrupt change has made Mr Carney's efforts to convince markets that rates will be left on hold for the foreseeable future all the more difficult. However he was keen to express that the 7% unemployment rate is merely a 'way station' at which the MPC will reassess interest rates. Should the economic data continue to improve, the MPC may have to bite the bullet and move to lower the unemployment threshold. This could help reassure the wider economy that rates will be left on hold, reducing the threat of derailing the consumption-led recovery. Policy makers will be keen to ensure 2014 is the first year since 2010 that growth forecasts are not revised downwards as the year unfolds.

Gaining traction

Six years on from the global financial crisis the UK economy finally appears to be gaining traction. By historic standards this recovery is likely to be a modest one and there are concerns whether we are getting the right sort of recovery. However it is worth mentioning a simple but important point that, after five years of recession and stagnation, some growth – whatever is driving it – is better than no growth. After all, what begins as the 'wrong' sort of growth could well be the trigger for a shift in to the 'right' sort as confidence, employment and personal wealth levels rise and gather momentum.

CALLING ALL LLPs - PROPOSED CHANGES TO LLP ACCOUNTING – HOW WILL YOU BE AFFECTED?

By Nick Randall

Nick Randall takes a look at the proposed changes to the SORP on accounting by LLPs.

As with previous versions, the proposed new statement of recommended practice (SORP) revealed in October addresses matters that are specific to the structure of limited liability partnerships (LLPs). The changes in accounting introduced by FRS102 in March will be equally relevant to LLPs and as the SORP is not a comprehensive guide to all accounting requirements, firms will need to consider both the SORP and FRS102 when they approach transition date.

The main changes, are set out below.

Statement of changes in equity

FRS102 requires that a statement of changes in equity (SOCIE) is presented as a primary statement. While there are many similarities between the SOCIE and the reconciliation of members' interests, more information is required for the latter. Where an LLP decides to use the reconciliation of members' interests in place of the SOCIE, it will need to present full comparatives.

FRS102 also permits, in certain circumstances, the combination of the profit and loss account, and SOCIE into a statement of income and retained earnings. However, the SORP doesn't recommend that LLPs use this option.

Annuities

While it may appear at first to be an unexpected outcome, a large proportion of annuity arrangements are likely to fall not under the accounting requirements of FRS102, but under FRS103 Insurance Contracts. This is due to the fact that many annuity arrangements include what are considered to be insurance risk features. A typical example would be mortality risk where, for example, an arrangement is limited to payments over the life of the former partner without any terminal payment. Although the way in which annuities are classified will change, and determining which standard and sections of FRS102 apply will be more complex, the underlying accounting in many cases will not change.

Classification of cash flows

Under FRS102 there are only three headings where cash flows are analysed and the SORP includes guidance on which might be the most appropriate category for cash flows specific to LLPs.

Merger accounting

As merger accounting is generally prohibited under FRS102, the SORP has been amended to remove previous guidance on merger accounting except in respect of transactions meeting the definition of group reconstructions.

This change is likely to lead to goodwill being recorded on mergers and therefore create additional complications for LLP accounting.

With the transition date for FRS102 for April year ends being April 2014, firms will need to set aside some time in the next few months to consider the impact.

ARE YOU DUE A REFUND FROM THE TAXMAN?

By Paul Tucker

The tax treatment of termination packages is a complex issue. Paul Tucker explains why many firms could be due a NI refund.

If you can answer 'yes' to the following questions your firm may be entitled to a national insurance (NI) repayment.

  1. Have you made any termination payments (including redundancies) in the last six years?
  2. Have you made any payments in lieu of notice (PILON)?
  3. Did you subject those payments to tax and NI?

HMRC's £30,000 tax exemption

Most firms are aware of the £30,000 tax exemption for termination packages, but need to consider carefully how the package is made up. Broadly speaking, the exemption should be available to set off against any element of a termination package that is not:

  • earnings (such as contractual payments, bonuses, holiday pay, etc)
  • for a restrictive covenant, or
  • a pension payment.

If the tax exemption is due, there will be no NI due (without limit). For example, if a payment of £50,000 is made and it does not fall within one of the categories above, £20,000 will be taxable, but there will be no NI on any of the amount.

Payment in lieu of notice

This is one of the most confusing issues. Tax and NI is due if the employee has a contractual entitlement to a payment in lieu of notice (PILON). This often applies to senior employees. Most employees will only have an entitlement to notice, rather than a payment in lieu of notice. Firms sometimes account for PAYE (tax and NI) on anything described as a PILON.

Firms may wish to take a cautious approach, but there is a potential cost. If your firm adopts the wrong treatment you may significantly overpay employer's NI (the current rate is 13.8%). It's also likely that you will deduct too much tax and NI from your employees.

Opportunities

There are two opportunities available to firms.

1. Future payments

You can obtain advance clearance from HMRC. For example, in a recent case we carried out a review where our client proposed to apply tax and NI to a non-contractual PILON and we concluded that the £30,000 tax exemption should apply. We then obtained HMRC clearance. Our client saved around £50,000 in employer's NI.

2. Repayments in respect of payments already made

All is not lost for payments already made and subjected to tax and NI. If a firm believes that a refund is due it can apply for a NI refund and it is possible to go back up to six years.

If you are about to make termination payments or redundancies, or have already done so and think you may be entitled to a refund, seek professional advice.

SETTING UP A PROFESSIONAL PRACTICE DOWN UNDER

By Stephen Rogers

Stephen Rogers of Nexia Court & Co in Sydney highlights some key issues to consider when setting up a professional practice in Australia.

In Australia, most professional firms can choose from an array of business structures available to businesses generally, rather than being restricted to operating through partnerships. In addition, in most instances, it's not necessary for interests in an entity to be held by the income earning professional.

While any decisions need to be based on the specific requirements of the individual practice, key factors to consider when choosing a structure will include: minimising income tax; minimising tax on capital gains; asset protection and funding requirements.

Income tax

Minimisation of income tax during the lifetime of a business usually takes one of three forms: ensuring that part of the income from the business can be derived (1) by a spouse or other adult associate; (2) by a child; or (3) by a corporate entity. This usually occurs by the entity deriving a payment for services (a wage or management fee); or income from a direct interest (such as a share or a unit in a trust); or income indirectly (through a trust distribution).

Paying salaries or wages to associates or management fees to trusts or companies are reasonable practices, but are open to attack by the tax authorities if no services are rendered, or if payments are excessive.

The best structure from a simplicity and income tax perspective would be:

  • sole trader (where the tax rate is at or below the 30% marginal rate – up to approximately $80,000)
  • discretionary trust (where beneficiaries are available to keep the average tax rate at or below 30%)
  • company or other entity vehicle taxed at 30%. Retaining profits within a practice structure to be shared with non-practitioners provides a tax advantage and the benefit of asset protection.

Capital gains tax

The taxation of capital gains is an important consideration if there is an expectation, or perhaps a real opportunity, for a capital gain to be made. Given the potential for the 50% capital gains tax (CGT) concession, the best structures to adopt are: sole trader; partnership of individuals; discretionary trust; partnership of discretionary trusts; unit trust and company.

While the latter affords the least opportunity to reduce tax on capital gains, decisions can be made about the way that the company is run, such as ensuring that only business activities are undertaken and business assets held, by the company.

Asset protection

The guiding principles for asset protection when choosing a structure are as follows.

  • Assets should not be accumulated by those at risk in the event of a claim being made. This includes holding shares in corporate beneficiaries, which is commonly overlooked.
  • In transferring assets away from someone who is at risk, it's important to be mindful of the potential claw-back rules under the relevant bankruptcy laws.
  • The best structure is a discretionary trust or a company or unit trust with a discretionary trust holding shares.

Funding

If a practice is taxed on an accruals basis for income tax it becomes necessary to pay tax on income before it has been received. Where a trust is the chosen trading structure, unless individuals are available to shelter income at rates of less than 30%, a corporate beneficiary can be used to shelter income.

Other taxes

Exposure to payroll tax, superannuation and workers compensation obligations also need to be considered when choosing an operating structure and, more importantly, how profits will be drawn.

Use of a service trust in a professional practice

Service entity arrangements are commonly used in Australia and can allow the professional practice to separate its business liabilities from some of the assets and help it obtain some incidental tax advantages. It can also help to provide for better management with a clear focus on the part of the business that creates wealth, structured separately from business cost centres.

PROTECT YOUR PARTNERS' PENSION BENEFITS

By Paul Garwood

Lifetime allowance falls to £1.25m from 6 April 2014

With rising stock markets and the introduction of 'individual protection', higher earners approaching retirement should check the value of their pension funds.

The lifetime allowance falls to £1.25m from the beginning of the next fiscal year and investors could find they are better off drawing their benefits now, or electing to adopt the current lifetime allowance of £1.5m. However, action needs to be taken before the end of the current tax year, to avoid a 55% tax charge on pension benefits exceeding £1.25m.

Individuals affected can elect for 'individual protection' and adopt their own lifetime allowance equivalent to the value of their pension funds as at 5 April 2013, provided this falls between £1.25m and £1.5m. This will have to be balanced against the alternative of fixed protection of £1.5m, no further pension contributions and a possible fall in income.

This reduction in the lifetime allowance will affect significantly more people than previous changes. Unwanted tax charges are a distinct possibility unless action is taken in good time. Forewarned is forearmed.

We have taken great care to ensure the accuracy of this newsletter. However, the newsletter is written in general terms and you are strongly recommended to seek specific advice before taking any action based on the information it contains. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. © Smith & Williamson Holdings Limited 2013. code 1485/2013/db 13/1127 expiry 31/05/2014

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Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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