Business Case: Navigating Sponsor Licence Following A Corporate Takeover

Binu Madhu
02/16/2024

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Case Background

Company A was a private firm that specialised in offering domiciliary care services to the elderly and those with disabilities. They were committed to delivering personal assistance, effective communication, and high-quality care. To achieve this, they had a team of dedicated care workers and home care providers. Company A was an A-rated sponsor and had about 25 sponsored workers on their payroll.  

Recently, company A went through a change in ownership and was subsequently rebranded as ‘Company B’. While the leadership of the company shifted, the employees, including the sponsored care workers, remained consistent.

The case problem

The general underlying principle of the Sponsor Licence regime is that the sponsor licence cannot be transferred following a change indirect ownership. The sponsor’s Level 1 user must report the change in ownership within no more than 20 working days of the change taking place. Failure to abide by these regulations can result in either a downgrade or revocation of the licence. This could also have a further impact on the sponsored workers as their permission to stay in the UK may also be cancelled.

Shortly after the takeover, the new management got in touch with the Home Office to gain access to the Sponsor Management system. In response, the Home Office provided the management with a 20-daytimeframe to surrender the old licence and, in turn, apply for a new licence to continue sponsoring the migrant workers.

Whilst this might sound straightforward, the process is laden with intricate steps and details. Like piecing together a very complex puzzle, A misplaced or forgotten piece can disrupt the entire process. In this case, any oversight, even a minor clerical error, can have severe repercussions. The gravest of these consequences would be the revocation of the sponsor licence, which would disrupt the company’s ability to employ international talents. So, it was essential that the company handle this transition with utmost care and precision.

In addition, the new leadership faced another challenge. They had to make decisions about the existing sponsored employees under the previous owners. The new management needed to evaluate each employee to decide who they would continue to sponsor and notify the Home Office about the ones they don’t want to continue to sponsor, in which case the Home Office will send those candidates notice of curtailment of leave.

In such cases, it is recommended that businesses take legal advice from immigration solicitors.

Our solution for Company B

Since the previous organisation failed to initiate the necessary procedures to formally transfer the sponsored workers and surrender the licence, the situation is more intricate than typical cases.

To help the new owners navigate through this tricky situation, we offered our expert and structured guidance:

1. We advised the management to immediately apply for a new sponsor licence in order to successfully transfer any sponsored workers that they intended to continue sponsoring. We had a detailed consultation followed by multiple rounds of collation and vetting of supporting documents. We were working against a very tight deadline as the 20-day timeline was approaching.

2. Referring to the specific rules found in “Sponsor Guidance Part 3,” we further suggested that the new owners request short-term access to the sponsor management system. This would enable them to perform crucial tasks for the sponsored workers, especially the ones not being transferred to the new sponsor licence.

3. We further advised the new management to establish contact with the Home Office to place a request to convert the sponsor licence held under previous ownership to a ‘dormant’ state.

Outcome

City legal was able to analyse the various challenges and provide the company with a quick and decisive action plan to tackle the short-term and long-term challenges. We were able to assign a dedicated corporate team with extensive SMS and sponsor obligations expertise to assist the firm with this uphill task. With our team working against the clock and ensuring complete adherence to all relevant guidelines, we crafted comprehensive and beneficial recommendations tailored to the needs of the situation.

As a result of City Legal’s guidance, the new business owners managed to secure a new sponsor licence from the Home Office. The key personnel from the new management were provided with continuous guidance and assistance throughout the journey. All actions instructed by the Home Office were undertaken within the required timelines, thereby ensuring continued compliance.  

Further assistance from City Legal

The organisation was extremely satisfied and impressed with the speed and expertise displayed by our corporate team and decided to retain us on a Premium Retainer package following fruitful discussions on the way forward for the business. We at City Legal understand that holding a sponsor licence is a major responsibility and requires continued vigilance in order to be compliant with all guidelines.

Being involved with all stages of the sponsor licence application and employee transfer, City Legal is best equipped to continue to act as the business’s legal representative and go-to solution for all their immigration needs.

If your business needs legal advice on matters, then contact us at 0208175 4000 or email us at enquiries@citylegalsolicitors.co.uk.

Read another sponsor licence case: Business Case: Sponsor Licence Reinstated After Suspension By The Home Office

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