Buying a dental practice and immigration issues
Make sure consideration is given at any early stage to any sponsor licence issues
Buying a dental practice can be complex, especially when the practice you are buying holds a sponsor licence. Sponsor licences allow businesses to sponsor international workers in roles including dental practitioners, dental nurses and dental technicians. Understanding whether the business holds a sponsor licence and has any sponsored workers should form part of your diligence process.
Sponsored workers and TUPE
A TUPE transfer may occur where there is a transfer of a business or part of a business that retains its identity after the transfer. Where TUPE applies and the seller has a sponsor licence and sponsored workers, the new owner (i.e. the new employer) becomes responsible for the sponsored workers.
The new owner must comply with sponsor duties including reporting changes to the Home Office – for example, where a sponsored worker leaves employment or the business’s name changes. However, a sponsored worker who transfers under TUPE does not need to make a new visa application if their role remains the same after the transfer.
it is important that when buying shares in a company, consideration is given to any sponsor licence issues at any early stage
Louise Crichton, Associate, Immigration & Visas, Thorntons Law LLP
If the new owner does not already hold the appropriate sponsor licence, they must apply within 20 working days of the transaction completing for a new sponsor licence. If they fail to apply, or their sponsor licence application is refused, the visas of all sponsored workers are likely be curtailed so that they only have 60 days left on their visa.
Either they will have to find a new sponsor within this period, or they and their dependants will have to leave the UK. This is obviously extremely serious for the new owner and the sponsored workers. We recommend that you seek specialist immigration advice as soon as you identify that you are buying a business or taking over a service where there are sponsored workers.
Sponsored workers and share deals
A share purchase is where a buyer purchases the shares in a company. In these circumstances, the employing entity does not change, but the beneficial owners of the company or the proportion of shares each owner holds in the company may change.
In the case of a share deal where there is a change in direct ownership of the sponsor (i.e. the employer), the new owners must apply for a sponsor licence if they do not already have one. This is because the Home Office sees it as a fundamental part of the sponsorship system that business owners accept responsibility for international workers that they sponsor.
The change of ownership must be reported to the Home Office within 20 working days and the old licence will be made dormant. This applies even though the sponsored worker’s employer has not changed, and their employment is continuing.
It is not uncommon for this aspect of sponsor licence compliance to be missed. There is a misconception that changes to sponsor licences are only required in cases where TUPE applies. Additionally, it can seem odd to businesses where there is no change to the key personnel involved, that the Home Office would require the business to go through the process of applying for a new sponsor licence. However, the rules are clear and are enforced in practice by the Home Office. Therefore, it is important that when buying shares in a company, consideration is given to any sponsor licence issues at any early stage.
Author
Louise Crichton
Associate, Immigration & Visas, Thorntons Law LLP
Tel: 0141 483 9020
Email: lcrichton@thorntons-law.co.uk