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Matthew J
Matthew J, Solicitor
Category: UK Law
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Experience:  4 y PQE (Partner) - Commercial / Residential Property & Property and Civil litigation experience
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as part of my business expansion I intend to rent a shop premises.

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as part of my business expansion I intend to rent a shop premises. this will be the 4th branch of my company. the current owner of the shop runs her own business from the premises in the same field (mens suit hire) and employs two staff. All I am doing is renting the premises for a monthly fee.
There will be no payment for goodwill, capital or stock. the two businesses have different names are XXXXX XXXXX and both established, mine for ten years, the other for 35 years. Do I have to take the staff on under TUPE, I'd rather not as I am unsure if taking them on is financialy viable.

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Customer: replied 3 years ago.

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Could you clarify this arrangement for me. If you are renting the shop are you also supposed to be running the new business? and if so will the current shop owner receive any profit share?
Customer: replied 3 years ago.

As I said, all I am giving the shop owner is a monthly rent. No other monies have or will be paid by me to her.

there is no "new" business, I am intending to expand my current business from three to four branches by opening up in these premises.


Unfortunately the business currently operating from these premises is in the same field as mine (hence the concern about TUPE), but it will be closed down as the business owner is retiring.

I do not want to inherit her staff for commercial reasons.


In that case no, there is absolutely no obligation on you to take her staff on. Your relationship would be of landlord/tenant and the tupe rules would not apply. It would be up to her to dismiss or make redundant her staff before you started as her business would no longer continue. The similarity of business is immaterial if the business is not actually being transferred.
Matthew J, Solicitor
Category: UK Law
Satisfied Customers: 671
Experience: 4 y PQE (Partner) - Commercial / Residential Property & Property and Civil litigation experience
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Customer: replied 3 years ago.

Any idea at what point would it be considered a transfer of business?

If the outgoing business owner leaves shop fittings behind and unused stock? again there would be no payment involved, its just she wants to walk away with the minimum effort as she struggles to cope.

She has agreed to pay for work to bring the building up to scratch, ie rewiring, decorating etc but no more than anyone renting premises would expect.

I will obviously be rebranding the shop with my signage and publicity materials etc.

Thanks for the extra info. As there is a degree of transfer of ownership of some items it is not as clear cut as if you were simply taking on a empty shell of building.

The legal definition for a "relevant transfer" under the TUPE rules would be in essence a "transfer of an economic entity which retains its identity". In looking at this a Court would take into account all of the various elements of the transfer of the sale.

Although it is unlikely that a Court would construe the sale of fixtures and fitting to qualify as a "relevant transfer" in order to remove any ambiguity you would be best advised to get your solicitor to detail the whole matter in a contract specifically excluding the sale of the business and the employees from the deal.

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