Finance documents Definition

GLOSSARY

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What does Finance documents mean?

Typically refers to all the documents that make up the terms of the financing arrangement between the borrower and lender(s). The term is normally defined in the facility agreement and generally includes the facility agreement, security documents, certain side letters to which a finance party is party and intercreditor agreements or deeds of priority

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Adding a new partner to a general partnership—checklist

Adding a new partner to a general partnership—checklist Identity of new partner What is the name and address of the new partner? Is the new partner subject to any restrictions under any existing agreements or covenants (eg employment, partnership, joint venture, finance documents) that may impact upon their ability to join or commit to the partnership? Business details Will the business of the partnership remain the same after admission of the new partner? Will the name of the partnership change after admission of the new partner? Will the premises of the business change? If the partnership is registered for VAT, who will inform HMRC of a change of partners for VAT purposes? If the partnership is registered for PAYE and employer’s NICs, who will inform HMRC of a change of partners for these purposes? Will the new partner be required to register for employee’s NICs? Partnership agreement and other documentation How does the existing partnership agreement provide for the admission of new partners? Will any changes be required to the...

Retiring from a general partnership—checklist

Retiring from a general partnership—checklist Identity of retiring partner What is the name and address of the retiring partner? Business details Will the business of the partnership remain the same after retirement of the retiring partner? Will the name of the partnership change after retirement of the retiring partner? Will the premises of the business change? If the partnership is registered for VAT, who will inform HMRC of a change of partners for VAT purposes? If the partnership is registered for PAYE and employer’s NICs, who will inform HMRC of a change of partners for these purposes? Will the new partner be required to register for employee’s NICs? Partnership agreement and other documentation How does the partnership agreement provide for the retirement of a partner? Are defined terms set out in the partnership agreement consistent with those in the proposed retirement deed? What restrictions are in place over the retiring partner post-retirement? Are the restrictions reasonable? Should they be added to? Will the retiring partner be required to give assistance...

How to move to working as a legal business person

How to move to working as a legal business person Operating as a ‘legal business person’ is something most of us aspire to, but what are the practical things we can do to achieve that? In this Practice Note, we will focus on practical steps/activities that will help us operate as a legal business person. Cast your mind back to your first few days in your current role. Consider the induction process: • was it a specific legal induction or a general commercial one, including non-lawyers too? • what form did it take—did you meet with commercial colleagues in a series of one-on-ones, or was it more of a show and tell experience? • did you have no induction process at all and were you just left staring at an empty screen waiting for your first emails to arrive? It is helpful to think what your ideal induction process would have looked like. Whatever that process would have looked like, ideally and in your mind’s eye, that’s what you need...

Moratorium in relation to a Limited Liability Partnership

Moratorium in relation to a Limited Liability Partnership The moratorium under IA 1986, Part A1 The Corporate Insolvency and Governance Act 2020 (CIGA 2020) made a number of significant changes to insolvency law as it relates to limited liability partnerships (LLPs), including introducing two new procedures: the moratorium and the restructuring plan. For further information on the restructuring plan, see Practice Note: The restructuring plan in respect of a Limited Liability Partnership for further information on the restructuring plan. The moratorium is an insolvency process whereby directors of insolvent companies and designated members of insolvent LLPs, and those that are likely to become insolvent, can obtain a 20 business day moratorium period. This process, which is found at Part A1 of the Insolvency Act 1986 (IA 1986), is designed to allow viable businesses time to restructure or seek new investment free from creditor action. An insolvency practitioner acts as the ‘monitor’. The members remain in charge of running the business on a day-to-day basis (known as a...

Discover our 288 Practice Notes on Finance documents

Representations and events of default plug-in clauses for loan agreements and security documentation: individual borrower or chargor

Representations and events of default plug-in clauses for loan agreements and security documentation: individual borrower or chargor DEFINITIONS The following definition needs to be added to Clause 1.1 (Definitions) of Precedent: Facility agreement (term loan): single company borrower—bilateral—with or without security or a guarantee. Mental Incapacity • means in relation to a person: (a) any unsoundness of mind—they are unable to make a decision for themselves in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain whether the impairment or disturbance is permanent or temporary; (b) any order being made or receiver appointed under the Mental Health Act 1983, the Mental Health Act 2007 or any analogous step or procedure being taken in any other jurisdiction; or (c) any step or procedure being taken in any jurisdiction which would restrict the capacity of the Borrower to enter into [this Agreement OR the Finance Documents to which they are a party] or would require the approval...

Part 26A restructuring plan Practice Statement Letter (PSL)

Part 26A restructuring plan Practice Statement Letter (PSL) IMPORTANT NOTICE FROM [insert name of Company] THIS LETTER REQUIRES YOUR IMMEDIATE AND URGENT ATTENTION. IT CONCERNS A RESTRUCTURING PLAN PROPOSED BY [insert name of Company] PURSUANT TO PART 26A OF THE COMPANIES ACT 2006 WHICH MAY AFFECT YOUR LEGAL RIGHTS AND ENTITLEMENTS AND YOU MAY THEREFORE WISH TO TAKE APPROPRIATE LEGAL AND OTHER PROFESSIONAL ADVICE ON ITS CONTENTS. THE PROPOSED RESTRUCTURING PLAN APPLICATION WILL BE CONSIDERED BY THE HIGH COURT OF ENGLAND AND WALES AT A CONVENING HEARING WHICH IS EXPECTED TO TAKE PLACE ON [insert date of convening hearing] IN, [insert location eg London] UNITED KINGDOM. SPECIFIC DETAILS OF THE CONVENING HEARING (INCLUDING CONFIRMATION OF THE TIME) WILL BE PROVIDED TO ALL CREDITORS/MEMBERS (AS DEFINED BELOW) BY A SEPARATE NOTICE IN ADVANCE OF THE CONVENING HEARING. [CREDITORS/MEMBERS WILL ALSO BE ABLE TO ACCESS AND DOWNLOAD THE NOTICE AT THE FOLLOWING WEBSITE: [insert website details].] YOU ARE BEING CONTACTED AS [insert Company name] BELIEVES YOU ARE A...

Dive into our 69 Precedents related to Finance documents

What recourse does a bank have if assets are disposed of in breach of the terms of the finance documents?

What recourse does a bank have if assets are disposed of in breach of the terms of the finance documents? Why is the restriction on asset disposals needed and what clauses should the bank consider in these circumstances? In a secured financing, the bank will be concerned to ensure that the value of its security is not reduced in any way during the term of the facility agreement, ensuring it maximises recoveries in the event it wants to enforce the security. Another key concern is that unless the bank can show sufficient control over any given secured asset, any purported fixed charge over that asset could be recharacterised as a floating charge. Therefore, it is usual for the bank to put restrictions into the facility agreement and related security documents preventing the borrower from selling, transferring or otherwise disposing of any of its assets during the term of the facility agreement without the consent of the bank. For more information, see Practice Note: Undertakings (covenants) —...

What does 'in the ordinary course of business' mean in connection with floating charge asset disposals?

What does 'in the ordinary course of business' mean in connection with floating charge asset disposals? The ability of a chargor to dispose of or otherwise deal with assets in the ordinary course of business is the hallmark of a floating charge. Chargors are therefore permitted to dispose of and deal with floating charge assets in the ordinary course of business prior to crystallization even if this is not specifically stated in the debenture or other finance document. The debenture may include a provision permitting the chargor to deal with their floating charge assets 'in the ordinary course of business' (effectively restating the law). Alternatively, the lender may want to impose additional controls on how the chargor deals with floating charge assets, eg by a negative pledge or a prohibition on disposals of floating charge assets except in the ordinary course of trading (see: Practical application). Understanding the meaning of 'ordinary course of business' in this context can be helpful: • in the context...

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Banking and Finance weekly highlights—11 July 2024

This week's edition of Banking and Finance weekly highlights includes: (1) NGFS publishes two complementary nature-related risk reports; (2) a news analysis examining the EU sanctions directive approach to breaches; and (3) the Supreme Court decision in Lipton and another v BA Cityflyer Ltd.

Banking and Finance weekly highlights—25 April 2024

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GLOSSARY