ContractStore Legal Business Blog

Lawyers’ fees account for 40 per cent of the cost of claims paid by motor insurers. In an interview on the BBC today, a representative of the insurers suggested that claimants who do not use a lawyer are likely to get a more generous settlement than those who do, and claims can be settled more quickly.

There should, of course, be a system that provides a fair and speedy resolution of claims. But the fault is not all with the lawyers.  Insurance companies are not always as quick to pay out as their customers would like and, of course, insurance policies contain all sorts of exclusions designed to minimise the risks for the insurers - and which only come to light when the policy holder makes a claim.

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Very many businesses have no proper system for ordering goods and services so we have come up with a set of forms to remedy the problem.

This is to ensure help you keep a proper record of all your orders. This can be useful in many ways, especially to ensure that the key terms are complied with by your supplier.

The order form is prepared with a space for signature by both purchaser and supplier, so you should, ideally, issue two signed copies, one for each signatory.

There are four forms in the new collection:

• Purchase Order for Goods
• Purchase Order for Services
• Acceptance of Order for Goods
• Acceptance of Order for Services.

You can also download the full set and save about 50% of the price - click here.

Like all our documents they are in Word format so you can edit directly before use.

These are a key set of basic documents that are great to have especially if you are starting up.

If you have had a problem with purchase orders or similar agreements we’d like to hear about it.

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The Government’s assault on small business has had a slight reprieve with the latest change of mind concerning capital gains tax. Last autumn, the Chancellor announced the ending of the 10% rate for businesses and the introduction of a new, flat rate of 18%. Since, ostensibly, the change was intended to do something about the massive gains of private equity firms and the people most hit would be owners of small and medium businesses, there was a fully justified outcry.

The latest position – which still has to be confirmed in the Budget next month – now seems to be:

• A flat rate of 18% will be charged on all capital gains from April – this will cover business and non-business gains, so the same rate will apply whether you are selling your business, a painting or a buy-to-let property
• The first £1 million of gain will be at the rate of 10% for certain business assets – this is to be known as ‘entrepreneur’s relief’.
• Indexation allowance and taper relief will no longer apply – i.e. there will be no adjustment to the rate however long you have owned the asset. Gains on assets owned on 31 March 1982 will be calculated by reference to their market value at that date.
• In our view it is time for the Government to introduce a fairer tax system that taxes the mega-profits of the City instead of the hard-earned gains of smaller businesses.

The Chancellor might say he is trying – but his clumsy proposal to impose a £30,000 charge on non-doms is not the cleverest idea to come out of the Treasury. And small businesses have already suffered recently with the removal of the corporation tax exemption for the first £10,000 of profits.

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Every Gulf country has laws governing the appointment of commercial agents, and an agency agreement may have to be registered with the Ministry of Economy or some other government department. Great care is needed in selecting an agent. Amongst the factors that you need to look at is the capability of the agent.

Also check out his standing and reputation. It is not going to be easy to run a Dun and Bradstreet check on prospective agents. Instead, you need to make enquiries - of the British Embassy, Bank, other companies - including other principals of the prospective.

Other considerations include the agent’s facilities, location and whether the prospective agent acting for your competitors.

In terms of the Agency Agreement and legal implications in the UAE, Saudi Arabia, Qatar and Oman, only a national or a company wholly owned by a national can act as commercial agent or distributor within the state. In Bahrain and Kuwait a company with foreign participation can act as an agent provided that 51% of the shares are owned by nationals.

In the UAE and Qatar an agent is entitled to commission on all sales of the principal’s products in the territory, irrespective of whether the sales have been made by the agents. In Bahrain and Saudi Arabia, the situation is slightly different. In Saudi Arabia, for example, principals are free to restrict the agent’s commission only to sales which are actually made by the agents.

The general rule throughout the Gulf is that a registered agency agreement cannot be unilaterally terminated by a principal.

An agent can claim compensation for termination or non-renewal based on the success which the agent has brought to the business with the principal.

As a lawyer, I would strongly recommend that you take legal advice before you finalise an agency agreement.

View the other posts in this 4 part series:

• Doing Business In the Gulf And Middle East (introduction)
• Opening an office in the Gulf
• Free Zones in the Gulf

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If you don’t like the idea of having a local partner or sponsor for your business in the Gulf, especially if your business is going to involve having a distribution centre - or an assembly plant - in the region, then you should consider going to one of the free zones. You don’t need a local partner - in effect the Free Zone authority is your local partner and issues your company with a licence. Your company therefore remains 100% yours and free repatriation of capital and profits are guaranteed for 15 years and in some cases for 50 years. Fujairah has a good free zone – and they have an advantage of having their port outside the Gulf, on the Indian Ocean.

Free Zones are not confined to industry – Dubai, currently leading the pack in attracting foreign business to the region has an internet city and has recently set up the DIFC (Dubai International Financial Centre) which has its own legislation, regulatory regime on Western lines and even its own civil court, presided over by an English judge.

View the other posts in this 4 part series:

• Doing Business In the Gulf And Middle East (introduction)
• Opening an office in the Gulf
• Appointing Agents In the Gulf

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There are generally two pre-requisites of setting up an office in one of the Gulf States.

Firstly, unless you are exempt, you need to have a national of that country who is either an individual or a company wholly owned by nationals involved in your Gulf business to a greater or lesser extent. Exemptions are sometimes given to independent professionals.

Secondly, you will need a licence from the concerned authority in the country. In the UAE, for example, his is the Municipality in the Emirate in which your office is established. The licence is very important not only because it is illegal not to have one but also because without a licence, you won’t get your own dedicated phone line electricity supply, and be able to obtain visas etc. for staff.

Before getting the licence you have to establish a business structure.

The Federal Companies law requires that at least 51% of the shares must be held by a UAE national in the emirate. Similar rules apply in the other Gulf States.

It is also possible to have an agreement with the local partner that he takes less than 51% of the profits - i.e. share the profits in a different ratio from the capital.

The Federal law in the UAE provides for several different types of company formation but the limited liability company, not so different from a private company in England, is generally used by foreigners. There are standard forms of Articles of Association to be used when forming the company.

If you do not want to form a local company, you may be able to establish either a branch office or a representative office. Whether you go for a branch or a representative office, you will need a local service agent (“sponsor”) who, in return for an agreed fee, will assist with the formalities, residence permits etc.

View the other posts in this 4 part series:

• Doing Business In the Gulf And Middle East (introduction)
• Free Zones in the Gulf
• Appointing Agents In the Gulf

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There has been a massive amount of new legislation in the Gulf States. Most of the Gulf countries now have sophisticated commercial codes, laws dealing with the incorporation of companies as well as legislation governing copyright and trade marks. Property laws are developing rapidly. The process is continuing - the UAE now has some environmental legislation which is likely to impact on new industrial projects. The increase in project financing and moves towards privatisation, all of which involve international banks, is helping to bring the Gulf states in line with other jurisdictions with a longer history of legislation.

Giles has written an article about doing business in the Gulf and Middle East for the Telegraph Business Club, we’ll be publishing information based on this to the blog in 3 further segments:

• Opening an office in the Gulf
• Free Zones in the Gulf
• Appointing Agents In the Gulf

ContractStore supplies a range of legal documents to assist those wishing to trade in the Middle East, including two free documents:

• Drafting Agency Agreements in the Middle East
• Notes on Commercial Law in the Gulf

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A man is suing William Hill for more than £2m, money he lost gambling after asking the bookmaker not to let him bet again.  28 year old Graham Calvert built his reputation as a greyhound trainer and became one of the best in Britain. He gambled heavily for some time before going for ’self-exclusion’ with his bookmakers.

By the time he stopped gambling with William Hill he had made a net loss of just under £2.1m, the amount he is now claiming against them in a High Court case due to start next week. His legal team claim that William Hill were negligent in allowing him to continue to gamble after agreeing that he would be self-excluded and that they should be held responsible for the consequences.

The case opens in the High Court next week. Do you want to bet on the outcome?

For more details - http://news.bbc.co.uk/1/hi/uk/7243656.stm

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If you receive dodgy offers through the post, you can help the authorities by taking part in the nationwide ‘Scamnesty’ campaign which is launched today by the Office of Fair Trading.

Scams cost the UK an estimated £3.5 billion a year.

As part of Scams Awareness Month the OFT, in partnership with over 50 local authority Trading Standards Services, is asking members of the public to collect any potential scam mailings they have recently received and drop them into designated ‘Scamnesty’ bins or boxes at local libraries and other public areas across the country. The designated bins are being promoted locally by Trading Standards Services with the theme ‘Drop in and drop them in it’.

Every year an estimated three million people fall victim to mass marketed scams such as bogus lotteries, deceptive prize draws and sweepstakes, fake psychics, get-rich-quick schemes and miracle health cures. Many of these scams are sent through the post, as well as by email or over the phone, and target the elderly and vulnerable.
However, OFT research suggests that less than 5% of victims report the scam to the authorities.

The Scamnesty campaign continues until 27th February.

For more information you can go to http://www.oft.gov.uk

 Or if you think you have been the victim of a scam, or you suspect a scam, call Consumer Direct for clear, practical consumer advice on 08454 04 05 06 or http://www.consumerdirect.gov.uk.

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Companies will have to look carefully at their employment and recruitment policies should an opinion of the EU issued yesterday be adopted by the full European Court. Sharon Coleman, a legal secretary, is suing her former employers, claiming that they failed to allow her time off to care for her severely disabled son. The opinion, handed down by an adviser to the European Court of Justice, holds that existing anti-discrimination laws which apply to the disabled also cover carers.

In other words, millions of workers who are forced to juggle fulltime care with their job would be able to demand more flexible working hours. About one in eight adults in the UK are carers.

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