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.
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.
