Immigration M&A

In nearly all corporate transactions, a licenced sponsor needs to take action to remain compliant during a merger and acquision process. 

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In nearly all corporate transactions, a licensed sponsor needs to take action to remain compliant with their sponsorship duties and avoid the risk of having the licence downgraded or even revoked. Failure to act can have a devastating impact on the business and their sponsored migrants whose leave to remain can be curtailed to 60 days. In addition to the compliance duties, the organisation must also consider its obligations under the prevention of illegal working regime.

Sponsor Licences are not transferable between organisations. It is therefore important to consider the impact on sponsor licences and migrant workers during corporate transactions. What happens to the business, the sponsor licence and sponsored workers depends on whether:

  • There is a change in direct ownership
  • You sell all or part of, or the controlling number of shares in your organisation
  • You are wholly or partially taken over by another organisation
  • You are restructuring to form new organisations

As part of a sponsor’s compliance duties, the sponsor must notify the Home Office of specified changes in circumstances, including when there has been a merger, takeover or change of ownership. These changes must be reported on the SMS within 20 working days of the change occurring. In some circumstances a new Sponsor Licence must be obtained.

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Our team will ensure that you maintain ongoing compliance with your sponsor duties and employing migrants generally. We have extensive experience and knowledge in this area and can assist you with ensuring you remain compliant with the Home Office requirements.

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Immigration M&A FAQs

What actions need to be taken when there’s a direct change in ownership? 

The new owners must apply for a new sponsor licence, as the existing licence cannot be transferred. Any existing sponsored migrants must be reported on the new licence once obtained. 

Is there a timeframe to report changes? 

Changes must be reported on the Sponsor Management System (SMS) within 20 working days of the change taking place. Failure to do this can result in the licence being downgraded or revoked.

If a new Sponsor Licence is required, this must be applied for within 20 working days of completion of the sale. 

What are the consequences of not reporting changes or taking it into account?

Failing to take steps to remain compliant can result in the Sponsor Licence being downgraded, or even revoked. It can also result in the Home Office curtailing the migrant workers leave to remain, meaning that they would either need to apply for an alternative visa, or leave the UK.

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