VAT Liability and Partnership Deeds

 
From 1 May 2007 partnerships have to register for VAT if they exceed or are likely to exceed the VAT registration threshold, which is currently £67,000, in respect of certain classes of services. Recent information from HMCE appears to indicate that where a VAT liability arises in respect of such services, it should be made clear whether the VAT liability falls on either the partnership or the individual partner providing the services. If this is not clarified in the Partnership Deed it appears that HMCE will deem the liability to fall on the partnership. This may result in the practice reaching the level where registration for VAT payments is necessary, which would not otherwise have been the case.
 

It is of course a matter for the practice as a whole as to how liabilities should fall but Ros Parkin – rap@lockharts.co.uk will be happy to advise on changes that may be necessary to practice Parntership Deeds.

Partnership Issues

While it is the wish of every partnership that things run smoothly, there will always be occasions when circumstances pose problems for your business, its partners and its employees.  Whether you are an existing partnership, or contemplating the formation of a new firm, it is essential that you take appropriate advice as these circumstances dictate.

Whether a problem arises out of a dispute over the nature or interpretation of your partnership agreement, your employee's rights and obligations, a matter relating to professional discipline, or a combination of several issues, it is crucial that you deal with it effectively and efficiently. 

Lockharts have considerable experience and expertise in acting for partnerships and are able to offer legal advice in the following key areas.
 
Partnership law
  • Drafting of partnership agreements for partnerships or LLPs,
  • Fixed price partnership agreement assessment,
  • Advising on the meaning and enforceability of clauses in existing Deeds,
  • Developments in the law such as the extension of the applicability of the Age Discrimination legislation to partnerships.
     Partnership Disputes
  • Negotiations and settlements when Partners retire voluntarily or compulsory,
  • Advice on internal partnership disputes, dissolutions and expulsion of partners,
  • Acting on behalf of partnerships and individual partners in ADR, mediation, arbitration and Court proceedings,
  • Advising on the enforceability of restrictive covenants, including acting to obtain injunction applications.
      Employment law
  • Drafting of employment contracts, staff handbooks and employment policies,
  • Advice on unfair dismissal, disciplinary and grievance procedures, redundancy, discrimination and business transfers (TUPE),
  • Advice on dispute resolution and compromise Agreements,
  • Representation and advice on claims before the employment tribunal,
  • More information.
      Disciplinary and Fitness to Practise Issues
  • Legal assistance to practitioners who are being or may be investigated or charged with a disciplinary offence by their professional or regulatory body,
  • Preliminary advice for practitioners who have been contacted by their regulatory body,
  • Representation for practitioners who are being investigated or subject to disciplinary hearings before a panel or Tribunal,
  • Combined experience of working almost exclusively with professional practitioners with expertise in partnership law, regulatory law and litigation,
  • Membership of the Association of Regulatory and Disciplinary Solicitors.
Property law
  • Commercial business sales and acquisitions,
  • Leases and premises development,
  • Re-mortgaging and co-ownership,
  • More information.
Intellectual property
  • Advice on trade marks,
  • Registrations at home and abroad,
  • Passing-off and infringement,
  • Assigning and licensing trademarks,
  • Advice on internet domain names,
  • More information.  
Whether or not your partnership issue appears to come under any of the above, please do contact our Head of Partnership Rosalind Parkin who will be happy to discuss your concerns with you or complete our enquiry form.

Partnership Issues

Partnership Issues

Changes in Capital Gains Tax (CGT)

Chancellor of the Exchequer Alistair Darling announced in the pre-Budget report that the rules on capital gains tax (CGT) will change from 6 April 2008.  The current system of taper relief allows investors to pay just 10% on investments held for two years. In place of the taper relief, Mr Darling is introducing a new flat rate of 18%.  He has intended to raise additional taxation to target private equity investors, who have been described as ‘paying less tax then their cleaners’.  The details of how this is to be done were not precisely spelled out. 
 
The net effect will be to set back the growth of the economy over coming years, by discouraging longer term investment and risk-taking.  This will hit all businesses in the UK and reduce the tendency for entrepreneurs to start new businesses.  The previous arrangements encouraged entrepreneurs to take higher risk and the tax system rewarded them accordingly.  The changes lead to expectations that many business owners will sell up in the period up to 5 April 2008, as people make sales to avoid much larger tax bills. 
 
This compares with the CGT position on disposal of personal assets.  The current effective rate is 24%. With the flat rate of 18%, general investors in shares and those with buy-to-let or second properties will find their position improved.  No holding period will be required to benefit from this new rate. 
 
Despite the new flat rate in CGT, Mr Darling said that the UK would remain “one of the most competitive single rates of any major economy”. 
 

Trade Mark Services

There has been an increasing awareness among clients about the value of branding to their businesses. Branding is as valuable a tool to the medical, dental, veterinary and pharmaceutical business sectors as it is to the consumer market more broadly. Anyone providing goods or services, whether in return for money or not, under a particular banner or sign should consider registering a mark. In particular, a trade mark is important in establishing brand awareness and is integral to issues of customer loyalty.

What is a trade mark?
 
Simply put, a trade mark is any unique sign used by an enterprise to distinguish its goods/services from those provided by other undertakings. A trade mark need not simply be a word (which incidentally includes foreign words or personal names) but could equally be a number, logo, slogan, shape, jingle, colour, smell, gesture, sound, combination of letters or even the shape of the packaging used to sell goods. It can also include combinations of these signs.
 
In a number of countries, a trade mark which has been used for a defined period attracts “goodwill” to it, whether or not it has been registered. If a competitor provides goods/services under a sign which is identical to or confusingly similar with the first trader’s earlier used sign and the earlier sign, albeit unregistered, has amassed sufficient goodwill, then the earlier sign’s owner is entitled to bring an action against the competitor on the grounds that his reputation/goodwill has been damaged. This is known – in the UK – as a “passing off” action. However, in a passing-off action, proving the evidence of ownership of the earlier mark, the extent of use of the earlier mark, the goodwill inherent in the earlier mark, the damage to the reputation of the earlier mark and the issue of confusion caused to an average customer of the goods or services in question can be extremely expensive. This is why it becomes important to register a trade mark: registration can simplify the process of stopping third parties from using (or registering) a conflicting mark. Registration can also, usefully, be a defence to infringement of another registered mark prima facie. 
 
Registered trade marks
 
When we are registering marks for clients, we need to be told how the mark is being used/to be used and be provided with a representation of the mark (if it is a logo or stylised form of an ordinary word or combination of the two). We also need to be provided with a list of the goods/services on which the mark will be used. There are 45 classes of goods/services against which a mark can be registered. If a client’s business expands into providing new goods/services a fresh application for registration for the expanded class must be made to the Registry.
 
A mark cannot be registered if it is too descriptive (e.g. “fantastic training video” or “softer bandage”) and the mark should not mislead people about the nature of the services or goods being provided. The trademark must also avoid conflict with a mark that is already registered by somebody else (unless the owner of the earlier registered mark provides consent).
 
The normal time for registering a trademark in the UK is between 6 and 9 months. It is possible to register a Community Trade Mark (covering the whole of the EC) although this process takes considerably longer (typically between 12 and 24 months) and is more expensive.
 
Under both systems, examination of the mark that has been applied for is conducted by the relevant registry (i.e. in the UK, by the UK registry or for a Community Trade Mark, by the Community Trade Marks Office (known as “OHIM”) in Spain). The distinctiveness of the trade mark will be examined first by the registry.
 
The Community Trade Marks Office will not examine the trade mark for conflict with an early registered trade mark. The practice in the UK is somewhat different. Up until October 2007, the UK Trade Mark Office practice was to refuse to register a trade mark if it conflicted with an already registered trade mark. However, after that date, the position changed. What happens now is that earlier applications or registrations that conflict with a mark forming the subject of an application for registration will be notified by the UK Trade Marks Office to the applicant (who will be given an opportunity to argue that his mark is not, in fact, similar to the earlier mark or marks). If the Registry agrees with the arguments put forward, the Registry will agree to drop the threat to notify and the mark will proceed to registration. If, however the Registry disagrees with the arguments, they will send to the holder(s) of the earlier right or rights a notification that a conflicting mark has been applied for together with full details of that mark. The earlier rights holder will then have the opportunity to oppose the registration during a 2 month opposition period – which can be extended by the intended opponent to 3 months in certain circumstances. Where the earlier right owned is a Community Trade Mark, the owner of the Community Trade Mark must have paid an “opt in” fee to the UKIPO to qualify for the service offering notification of applications for conflicting marks. Earlier UK Trade Mark owners and owners of prior International Registrations designating the UK qualify for the service without any fee being paid.
 
A trade mark registration is for a period of 10 years and can continue to exist for successive periods of 10 years ad infinitum subject to payment of renewal fees.
 
Our advice
 
We can assist with all aspects of trademark advice including:
 
  • Clearing a mark for use/advising whether or not a trade mark is suitable for registration
  • Counterfeiting issues
  • Trade mark portfolio management and maintenance.
We will provide a competitive costing at the outset of any matter (which comprises official fees and Lockharts’ own filing and prosecution fees) and can provide additional advice in relation to the marketing of medical, pharmaceutical and veterinary services relevant to your business.
 
Please feel free to contact us for further information. The first point of contact is Michael Barrett (mb@lockharts.co.uk).