Company Changes and Your Sponsor Licence banner


Company Changes and Your Sponsor Licence

  • Posted on

When your business is making changes the last thing on your mind will be your sponsor licence to sponsor overseas workers. After all, business structures and immigration law do not appear at first glance to be related but immigration solicitors warn that if you are making company changes you need to check the impact on your sponsor licence.

UK Online and London Based Immigration Solicitors and Sponsorship Licence Lawyers

For sponsor licence advice call the expert London immigration lawyers at OTS Solicitors on 0203 959 9123 or contact us online.

Companies and sponsor licences

When you apply for a sponsor licence, the Home Office grants your business the sponsor licence so the immigration rules specify how company changes impact on your licence.

If you are contemplating company changes it is best to speak to Sponsorship Licence lawyers about the effect on your sponsor licence so you can plan ahead and, if necessary, make any changes or a new sponsor licence application.

Reporting company changes

Company changes need to be reported to the Home Office using the sponsor management system (SMS) within 20 days of the change. Failure to notify a reportable change within 20 working days could result in implications for the continuation of your sponsor licence or the success of a fresh sponsor licence application.  Serious breaches could even result in an audit and Home Office inspection, suspension of the sponsor licence or even its revocation.

If you don’t use Sponsorship Licence lawyers to provide a sponsor licence management service, making changes to the company structure should trigger a request for specialist advice. If you do use a sponsor licence management service, make sure they are kept up to date with your plans so they can advise you on your options, costs and timescales.

Contact our team of Sponsorship Licence lawyers on 0203 959 9123 for sponsor licence advice.

What company law changes need to be reported on the sponsor management system?

If your business is:

  • Merging or being taken over by another company
  • Selling up
  • Changing ownership
  • Selling a controlling share base
  • Involved in a management buy out
  • Changing the company so you are hiving off some business activities into other companies

Then the changes need to be reported using SMS. If you are in any doubt about whether the changes are reportable it is best to ask because of the long term consequences to your business, and its ability to employ sponsored workers on skilled worker visas, if your company loses it’s A rating or has its sponsor licence revoked.

In addition, bear in mind that if you are merging or selling, an important consideration in the company changes may be the existence of the sponsor licence and the importance to the business of your skilled overseas employees. You therefore don’t want to fail to act and thus jeopardise your company plans. Furthermore, your take over partners or buyers need to understand the impact of their plans on your sponsor licence so they are not surprised by the impact of the plans on the sponsor licence and can budget in the time and cost of any changes.

Change in company ownership

If you sell your company, or you sell shares so there is new controlling ownership, you can't simply transfer the sponsor licence. The sponsor licence immigration rules say that the sponsor licence will be revoked. That’s OK if the acquiring company has an existing sponsor licence and can, if necessary, allocate existing sponsored workers a certificate of sponsorship. It isn’t OK if the new company doesn’t have a sponsor licence and doesn’t understand the importance of acting quickly to sort out obtaining a sponsor licence. Sponsored employees can't work for the company if there is a sale or change in ownership unless the sponsor licence is sorted out or the Transfer of undertakings (Protection of employment) regulations 2006 (TUPE) apply.

TUPE normally means the employee’s job is transferred to the new company under the same terms and the sponsored overseas worker doesn’t need a new certificate of sponsorship or to make a change of employment application provided:

  • The new sponsor has a sponsor licence and confirms that the worker will be sponsored by them and
  • The sponsored worker is doing the same job that they were doing for the old company so their role remains unchanged. This rule can catch you out if the new business is planning a restructure and reorganisation as part of the sale of the company. If that is the case, and the new company has a sponsor licence, they will need to allocate a certificate of sponsorship and the worker will need to complete a change in employment application.

The obvious question is what happens if the acquiring company does not have an existing sponsor licence but wants to continue to employ the sponsored employees? The sponsor licence immigration rules say the new company must apply for a sponsor licence within 20 working days of the TUPE transfer. If that application isn’t made then the company can't employ the sponsored worker as they don’t have the right permission. In addition to jeopardising any future sponsor licence application, they would also be in breach of illegal working legislation as the sponsored worker doesn’t have a right to work for the company unless they have applied for a sponsor licence.

Mergers and sponsor licences

Sponsorship Licence lawyers say the rules on what you need to do depend on whether the company you are merging with also has an existing sponsor licence.

If the company taking over your business does not already have a sponsor licence, they will need to apply for a sponsor licence within 20 working days. If they have a sponsor licence then the change must be reported within 20 working days and the company must say it is taking over the sponsorship of the employees on skilled worker visas. Your company sponsor licence will be made dormant on reporting the takeover.

The position is more complex if you are planning a partial merger or sell-off but in all company change situations Sponsorship Licence lawyers recommend sponsor licence specialist advice is taken because of the importance to the company and the sponsored employees of getting the reporting and application process right.

UK Online and London Based Immigration Solicitors and Sponsorship Licence Lawyers

For sponsor licence advice call the expert London immigration lawyers at OTS Solicitors on 0203 959 9123 or contact us online.

    Get in touch

    Please fill in the form and we’ll get back to you as soon as we can.

    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.