UK: Enterprise For Entrepreneurs, Growth Businesses And Their Advisers, Summer 2009

Last Updated: 7 July 2009
Article by Guy Rigby

In This Issue:

Building Your Dream Team

Are The Banks Back In Business?

Enterprise Finance Guarantee Scheme

Beating Interest Rate Risk

Asset-Based Lending

Business Briefs For The Busy Entrepreneur

Enterprise Alerts – What's Making The News?

Entrepreneurs' Toolkit – Reducing Owner Dependency

With finance tight for many businesses, this issue takes an indepth look at funding and how to get the best from your bank. Plus, a round-up of news and views aimed at helping busy entrepreneurs improve their business performance.

EDITOR'S COMMENT - WHEN THE GOING GETS TOUGH...

Times are tough for company directors. Achieving targets set last year or even last month is becoming more difficult, if not impossible. As directors, there are hundreds of things you need to get right, but where do you begin?

It's more important than ever right now to maintain your focus and objectivity. If you have concerns about any aspect of the business, raise them at the board or with colleagues. Is your business strategy still appropriate in the current market? Trading conditions have probably changed; have you kept up? Have you reviewed and adapted your business plan in line with current economic reality? Are your products or services still fit for purpose? Is your supply chain secure? Can you reduce your overheads? Do you have a sensible risk management strategy in place?

A preoccupation for many businesses is whether they have enough cash or whether they can access additional funding if they need it. The furore over the lack of bank lending and availability of credit will no doubt rumble on, as many businesses blame their banks for their ongoing difficulties. For some, the grievances will be justified. For others, there will be compelling reasons why banks will not grant or extend their facilities. This issue looks in detail at bank and alternative funding in the current environment.

Finally, do you have the right team around you, both in the business and externally? Are tougher times revealing management weaknesses or a lack of support from external advisers?

Don't give up until these issues have been properly addressed and, if necessary, take external advice and guidance. As the saying goes, "When the going gets tough, the tough get going!" But the tough don't have to go it alone.

For further information, contact:
Guy Rigby
Head of Entrepreneurs
020 7131 8213
guy.rigby@smith.williamson.co.uk

BUILDING YOUR DREAM TEAM

Building the right team of staff and external advisers is essential to the growth of your business.

We all know it's going to be tough just weathering the recession, let alone facing the challenges on the other side. To put your business in the best possible position, you'll need to make sure you've got the best people on board and that they're all working harmoniously together. Building a 'dream team' means looking at your required mix of skills in the broadest possible sense – both within your business and outside it. Here are some pointers.

Management And Staff

Have you got the best people you can afford working for you? Despite the difficult job market, talented people in your business can still be lured away, so don't ignore your rewards and incentives – including non-monetary rewards.

Happy, motivated employees will add value to your business and there are a variety of schemes, such as salary sacrifice, that can help your employees and save you money. Keeping your employees informed about what's going on in the business as well as understanding where they fit in and being shown how they make a difference will incentivise staff to work towards your goals.

Non-Executive Directors

Many growth businesses suffer from a lack of experience, knowledge or expertise and regularly find themselves 'reinventing the wheel'. Through an experienced nonexecutive director (Ned), you can benefit from an objective perspective on your business and opportunities that you might otherwise overlook. The trick to making the most of Neds' experience of running successful businesses is giving them the opportunity to challenge your thinking in an open and honest way. This can give you insights into your sector, new contacts with potential customers and suppliers, business intelligence and knowledge of your competitors, strategic input and financial expertise to help you raise capital, sell or float.

For further advice on working with Neds, contact us or the Non-Executive Directors Association at www.nedaglobal.com.

Bankers

In the current climate, maintaining a good relationship with your bank is more critical than ever for business success. You'll no doubt be reviewing your interest rates and charging structure, but make sure your bank is still the right fit for your business. Invest time and energy into communicating with your bank, treating it as an integral part of your team. Bankers who understand your needs and objectives are more likely to assist in the event of cashflow difficulties or other problems. Make sure you provide regular copies of business plans, financial projections and reports. Maintain a 'no surprises' policy, letting the bank know of funding needs as soon as possible. Make sure information is accurate and plan ahead carefully for any meetings.

Working Together

Finally, it's important to consider whether your internal and external teams work well together. Be open on long-term objectives, define roles for key projects clearly and update everyone regularly so they understand the status and ongoing needs of your business. And make sure everyone talks to each other. A successful and communicative team will provide firm foundations and help your business thrive.

External Advice

For an impartial view on working with external advisers, we asked the FT's beermat entrepreneur expert, Mike Southon.

Every entrepreneur I have interviewed for the Financial Times agrees that it's difficult making the transition from 'sapling' (up to 25 people) to 'mighty oak' (over 50 people) and requires the entrepreneur to hire 'grown ups' – people with real business experience, particularly in managing teams and effective project management. The next step is to gather a top team of external advisers to take you to the next stage, up to 150 people.

There is no real alternative to bringing expert advice on board; the challenges are significant, and often require complex and very specialist advice based on many years' experience. I always advise entrepreneurs to start developing the right relationships early in the process, seeking out the right service providers in key areas such as accounting, finance, law, taxation, property and HR.

The key is to find the right individuals in professional firms that you like on a personal level and who are willing to take the time to understand you and your business. Fees should be excellent value for money, based on measured deliverables in the growth of your organisation.

ARE THE BANKS BACK IN BUSINESS?

There is increasing evidence that the banks are lending again, amid unprecedented Government support and guarantees.

Some businesses have already failed and many more will struggle to survive as the global recession plays itself out. The much-maligned banks have come in for heavy criticism for a perceived failure to provide desperately needed funding to struggling businesses. But let's look at why this has happened.

As we all know, there are good times and bad times. In the good times, history shows that investors, bankers and even consumers can get carried away in a general wave of euphoria. Consumers create demand, investors buy the businesses that satisfy that demand and the banks, among others, fund those businesses. As the cycle progresses, prices rise, investors overpay and banks over-lend against what turn out to be unrealistic assumptions and insufficient security. A bull market bubble is created, where normal rules cease to apply. Prices overshoot and, at some point, the bubble bursts. Demand collapses and banks and investors lose their money.

And so we arrive at the bad times. Our current woes have been exacerbated by an exceptionally long 15-year boom, resulting in low interest rates that prolonged the good times far longer than we might otherwise have expected. During this time, our businesses have become used to an ever-increasing supply of affordable credit. It has therefore been a rude and unpleasant awakening to find the rains suddenly arrive, with global demand falling off a cliff and the 'umbrella' provided by the banks broken.

Now it appears that the banks are back in business and there may be light at the end of the tunnel. But despite the apparent increase in the availability of funding, businesses will still find it challenging to secure appropriate finance. Businesses must therefore assess their financing needs and consider whether they are backable. Do they have sufficient equity to gain the confidence of bankers and other lenders? Is their financing structure appropriate or will lenders be exposed to unnecessary risk? One thing is clear: businesses requiring finance will need to be demonstrably sustainable and credible. Only well run, clearly viable businesses need apply.

So how can you give yourself the best chance of attracting suitable bank funding? Here are some tips.

Pursue An Achievable Strategy

Businesses need to ensure that their strategy is realistic and that they have the right management to succeed. The wrong strategy will mean pushing water uphill and the wrong management will almost certainly lead to poor execution. You should have a clear idea of where you want to be in three to five years, as well as identify the critical success factors to achieve along the way.

Prepare A Strong Business Plan

Begin with the end in mind, showing when and how loans will be repaid and how banks and investors will achieve their returns. Make sure that projections are realistic and that profit and loss, cashflow and balance sheet forecasts are fully integrated. The business plan is also the place to show that the market and competition have been considered, as well as demonstrating the skills and capabilities of your management team and employees.

It's Not Just You!

It's difficult for one person to manage all the demands and challenges of a growing business. A team with complementary expertise gives a business a better chance of success and makes it more attractive to potential investors. A mentor or non-executive director – someone who's been there before – can add valuable knowledge and experience.

THE ENTERPRISE FINANCE GUARANTEE - AN END TO SMES' CREDIT WORRIES?

Is the Government's Enterprise Finance Guarantee scheme working?

The Government's £1.3bn Enterprise Finance Guarantee (EFG) scheme was launched in January to replace the Small Firms Loan Guarantee scheme. The new scheme is intended to unblock the credit market and stimulate bank lending to viable businesses to give them access to the working capital they need.

How Does It Work?

The scheme supports bank lending for periods from as little as three months up to ten years to UK businesses with a turnover of up to £25m. The Government undertakes to pay the banks 75% of the value of the loan if the borrower defaults.

The scheme allows qualifying businesses to secure loans of between £1,000 and £1m until 31 March 2010. The Government charges borrowers a premium of 1.5% over commercial rates. This will increase to 2% next year.

The EFG is now available through 26 lenders, including most high street banks. It can be used to support new loans, to refinance existing loans where the loan is at risk due to deteriorating quality of security, or to convert an existing overdraft into a loan to meet working capital requirements. In theory, businesses can use the scheme to tackle short-term cashflow problems.

Slow Progress

Despite their reduced exposure under the scheme, there have been widespread reports that banks are asking for personal guarantees from directors of companies applying for EFG funding, sometimes for amounts in excess of the unsecured 25%.

Critics say that levels of lending under the scheme have been very limited to date, although there is no doubt that loans are being made. Part of the problem appears to stem from a lack of clear guidance on how the EFG operates, leading to confusion among both banks and customers about how it all works. This may also explain why banks are applying the scheme differently. Detractors also point to a widespread lack of awareness of the scheme among UK companies.

Banks Hit Back

The banks, on the other hand, say that the scheme is working and gathering pace. They point out that the scheme is not designed for all businesses, but specifically for those that are unable to get a loan under normal circumstances. As such, the banks stress that only viable businesses need apply and that funds can, and should, come with specific restrictions to safeguard both the banks' and public's investment, notably through personal guarantees.

Most banks appear to be requesting personal guarantees to cover the amount not guaranteed by the Government, but some are looking for greater personal guarantees because of the conditions that the Government can enforce to limit the public's exposure to defaults if the failure rate is too high.

One major bank that we have spoken to recently said that, although it was not one of those requesting full personal guarantees, it will generally ask for guarantees of "an appropriate nature" so that borrowers have some "skin in the game" and that lending will only be made to businesses where normal security, e.g. charges over assets, has been taken and there is an excess requirement. Specifically, they said that they would never seek security over the family home.

From the limited evidence, it's pretty clear that the EFG scheme has so far struggled to deliver on the scale needed by the UK's businesses. However, some funds are now flowing and the Government and the banks need to do more to publicise this and the specific criteria under which loans can be made, providing clarity and focusing in on the businesses that we desperately need to help stimulate and reflate our economy.

BEATING INTEREST RATE RISK - CAPS, COLLARS AND SWAPS EXPLAINED

Interest rates are at historic lows, but how can you avoid the uncertainty of future interest rate movements?

The downward spiral of interest rates over the last six months has demonstrated the dramatic impact that interest rate volatility can have on borrowing costs and cashflow. Interest rate management is clearly important for long-term financial planning and there are a number of hedging tools that can help bring certainty to budgeting and forecasting. The most common tools used to minimise exposure to interest rate fluctuations are a combination of caps, collars and swaps. No one approach will suit all cases, so it's important to consider all the options and make a decision based on your own circumstances.

Base Rate Cap

The simplest tool is the base rate cap, which sets a ceiling on a borrower's interest rate costs. The bank agrees to pay you the difference between the average base rate and the cap rate, where the average base rate is above the cap rate. Payments due to you take place at pre-set times over the life of the cap. In return you pay the bank a premium. This can be up-front or in instalments. A cap does not 'lock in' the borrower to a fixed rate and can be adapted to provide the level of protection required. Usually, the borrower is seeking to limit the risk of rising rates, while getting the full benefit of declining rates.

Base Rate Swap

The base rate swap allows you to convert floating rate (base rate) debt to fixed rate debt. It is a contractual agreement whereby the borrower and the bank exchange a series of payments based on different interest rate indices, but on a common notional principal. You fix your borrowing costs for a certain amount of time at a fixed rate. If the London Interbank Offered Rate is higher than that rate on the roll-over date (usually quarterly), the bank will pay you the difference. If it's below, then you compensate the bank for the difference. Like a cap, a swap is not a commitment to borrow. A separate decision can be made on how and when to borrow. Unlike other forms of protection, there is no upfront fee payable. Swaps can be tailored to a specific debt repayment profile and can be reversed at a future date.

Base Rate Collar

A base rate collar is a combination of a cap and an interest rate floor – a minimum interest rate. The borrower is able to limit exposure while benefiting from favourable rate movements within a pre-agreed range. Premiums are generally lower than for caps because of the inclusion of the interest rate floor. A 'zero premium' collar can often be structured so that no premium payment is required. Collars can be adjusted up or down to suit specific cashflow requirements.

It's well worth including these options in discussions with your bank and modelling them to consider whether they might provide additional security or comfort.

ASSET-BASED LENDING - AN ALTERNATIVE SOURCE OF FUNDS?

With traditional sources of working capital for SMEs in limited supply, businesses are increasingly exploring alternatives such as asset-based lending.

Asset-based lending (ABL), usually incorporating factoring or invoice discounting, was once considered the lending of last resort, but times have changed and this reputation is now largely unfounded. So what is ABL and what kind of businesses does it suit?

ABL generates finance against a company's existing assets including stock, debtors, plant, machinery and property. Most ABL is done in conjunction with an invoice discounting facility, so it is most suitable for businesses that supply goods and services on credit, business to business. Very few lenders will look at businesses where the end customer is a consumer.

ABL is particularly good for start-up businesses because, as sales rise, the availability of finance rises with it. But the reverse is also true, and many established and stable businesses are seeing their ABL facilities diminish due to falling sales. Sales-linked finance facilities such as invoice discounting and ABL have been proven to help businesses grow far faster than with a more restrictive, traditional overdraft facility.

Lenders generally like a spread of good quality debtors, so businesses with just a single or a few customers may struggle to get a facility. If debtors are well spread, quality becomes less of an issue.

People often think ABL is more expensive than a traditional overdraft but this is not usually the case. Costs vary enormously, but generally the stronger the business, the more negotiating power you will have.

Further useful information and a list of ABL providers can be obtained from the Asset Based Finance Association at www.abfa.org.uk

BUSINESS BRIEFS - ESSENTIAL FINANCIAL INTELLIGENCE FOR THE BUSY ENTREPRENEUR

Beating The Budget Blues

The recent Budget will have disappointed many growing businesses, with business owners left feeling that their concerns were largely ignored by the Chancellor.

On the upside, the main rate of corporation tax, for profits above £1.5m, will stay at 28%. And the pledge to defer the increase in the small companies' rate to 22%, announced in the Pre-Budget Report in November 2008, has been honoured – the rate remains at 21%.

Now that the dust has settled, here are some things you may want to consider from a tax planning perspective.

  • If your company has cash to spend, you can invest in plant or machinery this year and take advantage of increased capital allowances. The main capital allowance rate has been temporarily doubled to 40%.
  • Make use of current year losses (up to £50,000) and reclaim tax paid on profits made in the past three years. This is in addition to the normal one year loss carry back for corporation tax purposes.
  • Make a provisional loss carry back claim, and receive a cash refund by carrying back this year's loss before your tax returns are filed.
  • Consider accelerating bonuses to avoid paying additional income tax and National Insurance when both rates rise in April 2010.
  • Owner-managed businesses should look at accelerating payments of dividends before the increase in dividend tax to 42.5% takes effect in 2010.
  • If you are a sole trader or partnership, consider incorporation to retain profits and avoid paying the new 50% top rate of tax.

Pre-Packs Unpacked

Companies which are struggling have a number of options, including formal insolvency procedures. One option for corporate recovery which has been a hot topic recently is the so-called 'pre-pack insolvency'. The press has been awash with headlines about the pre-pack sales of several well-known high street retailers. These were sold out of administration shortly after administrators were appointed. To the man on the street, and many creditors of these businesses, the deals have raised eyebrows and caused concern.

A pre-pack insolvency is the early marketing of a business for sale once concerns over future viability surface.

Discrete but comprehensive marketing identifies the highest bidder for the business, which is generally a new investor, but may be existing management. In some cases it may bring about a solvent sale of the company with no loss to creditors. If insolvency cannot be avoided, a sale agreement is negotiated prior to the insolvency and is completed immediately after, with minimum disruption to the actual business.

Marketing the business early to a broad number of purchasers has a number of advantages. In situations where the company does become insolvent, a pre-pack allows a rapid transfer of the underlying business out of administration. This maximises the amount recovered and generally preserves jobs both at the company concerned and among its suppliers – just what the economy needs.

In the right circumstances, the pre-pack is a very useful addition to the corporate recovery toolbox, together with debt/ equity swaps, compromises with creditors and trading administrations. While wider understanding of the benefits of prepack sales and greater disclosure of the circumstances are needed, it seems likely that they are here to stay as an important tool of business rescue.

Don't Keep Staff In The Dark

Many employers back away from staff communication in difficult times. But staff need reassurance and support, particularly when the financial climate is uncertain, to help them stay focused. Here are some suggestions on how employers can make this happen, even when they're unsure themselves.

  • Keep the team focused on what they can do and the service they are providing. Remind them of your values and service standards, and demonstrate these values yourself in your behaviour towards them and your clients.
  • Take time to speak to individuals in your team so they can raise concerns. You may not be able to answer all of their questions, but you can make sure they feel supported and valued in the work they do.
  • Agree work priorities with each individual, so that people are crystal clear about what you need them to do and how their work makes a difference.
  • Provide as much information as you can on changing circumstances, and make sure that staff don't have to rely on the internal grapevine to find out what's happening.
  • Encourage your staff to think creatively about new or different ways of making money, raising your profile or delivering your goods or services. Work through each idea and build action plans that let the team see quick results wherever possible. If an idea is a success, give credit where it's due and promote the idea to other teams.
  • If you do have to make redundancies, make sure that you do everything that you can to treat leavers with respect and to recognise their contribution to your organisation. This is important for both those who leave and those who are left behind – a compassionate approach will make a world of difference.

Handling these issues and providing support to your staff may be one of the toughest challenges of your career. Remember that your team are used to 'reading' your body language, and they will use you as a barometer for the health of the organisation.

Finally, make sure that you and your team are aware of how any changes in your business are affecting your customers or clients.

Employers' Costs To Rise With Introduction Of Personal Accounts

The Government's new pension scheme, known as 'personal accounts' comes into effect on 6 April 2012. It is designed to encourage greater private saving by introducing a low-cost investment vehicle.

Employers will be responsible for enrolling their employees and must contribute at least 3% of qualifying earnings, while employees will have a minimum 4% contribution limit. There will be a maximum contribution level of £3,600 per annum. Qualifying earnings are between £5,035 and £33,540 per annum (based on the 2006/07 year) and include salary, wages, commission, bonus, overtime and maternity, paternity or adoption pay.

Employees can opt out if they wish and qualifying schemes (occupational or personal pensions) which fulfil specific 'quality requirements' such as minimum earning limits, standard scheme tests and auto-enrolment, will be exempt.

From 2012, employers will be legally required to auto-enrol employees into either personal accounts or a qualifying pension scheme. Most companies will see their costs rise as a result – not only those introducing a pension for the first time, but through higher take-up rates because of auto-enrolment. In addition, commission, bonuses and overtime are often excluded from the definition of salary for company-sponsored pensions, so qualifying earnings for personal accounts will be wider than for most existing schemes, meaning higher costs to employers. Businesses will also need to ensure that contributions to qualifying schemes meet the minimum criteria.

As personal accounts are aimed at staff earning up to £33,540, pension provision for senior employees is still required. All UK companies will be required to provide a pension scheme, so this will no longer be a competitive advantage in the job market. To minimise the potential impact, employers should start planning now.

Watch Your Back – Fraud Increases In A Recession

Challenging times for businesses lead to increased levels of fraud. As economic conditions worsen, more businesses and many people will feel the pressure to meet targets, pay bills and keep their jobs. For some the temptation for dishonesty may be too great.

The most common frauds during a downturn include falsifying management accounts to earn bonuses and share options, falsifying income to gain funding and management inflating results to retain their jobs.

Directors should be aware of the increased risk and act early. All employees should understand the policies and procedures in place to protect the business as well as to support potential whistleblowers.

The following steps can reduce the risk of fraud in your business.

  • Create an environment where fraud is unacceptable.
  • Identify the risk of fraud in your business in order to spot the weak areas and put measures in place to reinforce your infrastructure.
  • Give specific responsibilities to individuals or departments to ensure focus and ownership.
  • Review the checks and balances in your internal reporting lines to prevent fraud from slipping by unnoticed.
  • Understand the underlying causes of recent fraud cases. This will enable you to spot any patterns or consistent warning signs for your business and you will know what kinds of behaviour to watch for.
  • In larger businesses, consider developing fraud awareness sessions to ensure your employees know exactly what is considered fraud, how to spot warning signs and what to do if they suspect any criminal activity. If they know their rights and what they are supposed to do, they are more likely to blow the whistle when necessary.

Forensic accounting can determine how the fraud started and who knows about it. The sooner fraud is detected and stopped, the less it will cost your business.

ENTERPRISE ALERTS - WHAT'S MAKING THE NEWS?

New Internet-Based Conferencing Product From Fluidata

Independent telecoms provider Fluidata has launched a high definition internet-based video conferencing product, 'Video Presence'. Because it runs over the internet, Video Presence can be set up without the need for an additional private network, unlike many video conferencing products on the market.

Fluidata develops unique solutions which intelligently marry different technologies to deliver custom-made connectivity services. It was nominated for Computing magazine's 'networking and communications supplier of the year' in 2008. The company was founded in 2004 by Piers Daniell, who formed his first company at the age of 15.

Commenting on Fluidata's achievements, Guy Rigby says, "Piers is a forward thinking technology entrepreneur. He has the maturity of an experienced CEO and is an inspiration to us all."

For further information, visit www.fluidata.co.uk or read Piers' blog at www.piersdaniell.com

Virgin Atlantic Launches PitchTV

Entrepreneurs in search of investment and exposure for their business will have the chance to pitch their ideas to potential investors flying on Virgin Atlantic. Video pitches up to two minutes long can be uploaded at http://entrepreneur.virgin.com/pitchtv/

From June 2009, Virgin will select the best pitches each month and then let the online community vote for their favourites. The winning videos will be showcased on Virgin Atlantic's onboard PitchTV show.

Outstanding UK Businesses Recognised

A record number of UK companies were named as winners of The Queen's Award for Enterprise 2009. A total of 194 Queen's Awards were announced this year, the largest number in 44 years of the scheme.

Awards are presented in three categories: International Trade, Innovation and Sustainable Development. In addition, 11 individuals received The Queen's Award for Enterprise Promotion for their efforts to encourage UK entrepreneurship.

Winners included small businesses with just two employees, a 106-year-old family business that creates and exports exclusive fabric and wallpaper, a small company that restores and exports antique violins and cellos, a web-based service designed to assist farmers to manage herds of dairy cattle, a medical risk assessment system used by travel insurance providers as well as household names such as BBC Worldwide, transport firm Arriva and fashion company Paul Smith.

A survey of last year's winners about the impact of the award found that more than three-quarters reported it had brought added commercial value to their business and 57% of International Trade winners said it had increased their profile overseas.

In addition to recognition and extensive press coverage, winners are entitled to use The Queen's Award Emblem in advertising, marketing and on packaging for a period of five years as a symbol of their quality and success.

For information on the 2010 awards, visit www.queensawards.org.uk

ENTREPRENEURS' TOOLKIT - THE CHALLENGE: REDUCING OWNER DEPENDENCY

Owner managers are often the biggest barrier to the growth and success of their own business.

It's important to recognise that businesses that are dependent on their owners are unlikely to achieve a significant capital value should they wish to sell.

The Solutions

Begin with the end in mind.

  • Most businesses are owner-dependent at the outset. This is natural, but the skill lies in reducing this dependency over time.
  • At the point of sale, the business should be able to run without the involvement of the owner, except where the owner is performing a line management role that can be filled through normal recruitment.

What You Should Do

  • Let go of routine management tasks.
  • Hire the best people you can afford to employ.
  • Develop the team's skills, knowledge and understanding.
  • Give your managers the tools and authority to do their jobs.
  • Motivate and encourage your management team.
  • Make independence of management clear to all your stakeholders.
  • Take charge of business strategy and focus on the big issues.
  • Maintain a sensible work/life balance.

What You Shouldn't Do

  • Interfere in the day-to-day activities of your managers.
  • Undermine or criticise the activities of managers in front of staff.
  • Take credit for the success of other team members.
  • Introduce unnecessary and/or burdensome management systems.
  • Allocate responsibility without authority.
  • Abrogate your responsibility for the management of the business.
  • Lose sight of your objectives and goals.

And Finally

Be a strategist. Aim to spend at least a third of your time thinking about the future of your business. Try to work 'on' the business, not 'in' the business.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.