UK Law and Practice Contributed by: Paolo Palmigiano, Rachael Roberts, Helen Farr, Debbie Heywood and Louise Popple, Taylor Wessing LLP
sectors, or is active in any sector but there are national security issues. Since filing is voluntary, there is no obligation to wait for approval before completing. However non-notified transactions that raise national security concerns might be called in for review by the government. Asset deals and IP licensing transactions can be subject to call-in if they raise national security issues, and it is possible to notify voluntarily. The Act has extraterritorial application (therefore, for example, it will apply to acquisitions in the USA, Canada, EU, China or any other jurisdic - tions of non-UK entities that conduct activities in the UK or supply goods and services in the UK, even if they do not have a direct presence there). 2.2 Procedure and Sanctions in the Event of Non-Compliance Notifications are made to a dedicated govern - ment unit in the Cabinet Office, the Investment Security Unit (ISU), through a digital portal. The form to complete is not overly complex and, within a couple of days, the ISU will confirm whether the filing is accepted or if more informa - tion is needed. Once the Secretary of State con - firms acceptance, a review period of 30 working days will start. This could end with a clearance or a call-in for an assessment period of a further 30 working days, at the end of which there can be clearance, clearance with conditions, prohi - bition or an extension of 45 working days for further review. With possible suspensions dur - ing the assessment period, full national security scrutiny can be estimated to be up to 21 weeks. Closing a transaction that is subject to manda - tory notification without notifying and obtaining clearance carries a heavy fine of up to 5% of the total global turnover of the acquirer, or GBP10 million (whichever is greater), and imprisonment
of up to five years, and the transaction becomes void. 2.3 Commitments Required From Foreign Investors The government has accepted commitments in several cases, such as requiring certain capa - bilities to remain in the UK, Chinese walls for sensitive information and restricted access to sensitive areas, etc. 2.4 Right to Appeal If a company wishes to challenge certain deci - sions of the Secretary of State – for example, to approve, block or unwind a transaction – it can apply for a judicial review of the decision. Judicial review is the mechanism by which the courts review the lawfulness of a decision tak - en by a public body. An application for judicial review can be brought on the grounds of illegal - ity, procedural unfairness or unreasonableness/ irrationality, or for a breach of a right protected by the European Convention of Human Rights. Normally, an application for judicial review must be made “promptly and in any event within three months” of the decision under challenge. How - ever, the NSIA modifies the term, and an applica - tion must be made within 28 days of any deci - sion (extendable in exceptional circumstances). 3. Corporate Vehicles 3.1 Most Common Forms of Legal Entity The three most common types of corporate vehicles in England are: • a private company (Ltd) limited by shares; • a public limited company (PLC); and • a limited liability partnership (LLP).
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