Sponsor Licence Change Of Ownership: A Guide For Businesses

A Sponsor Licence is a key part of operating a business which employs overseas workers. When certain changes take place, especially an update of ownership, it is vital that the correct steps are taken otherwise it could lead to severe penalties.

If you are unsure about your company’s obligations as a Sponsor Licence holder then reach out to us at +44 (0)333 414 9244.

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Benefits of Choosing IAS for Your Sponsor Licence Needs

Our dedicated UK corporate immigration lawyers deliver our services through a comprehensive and personalised approach suited to fit each business client that we work with.

We can assist you in getting a UK Sponsor Licence, generating a certificate of sponsorship, and applying for a work visa for your employee. Whether this is your first application, your initial application was refused, or you were found to not be compliant in the past, we can help.

With a successful track record, IAS eases the process for you so you can focus on other parts of your business. Here are more things you enjoy by working with us:

Our lawyers will assess your Sponsor Licence case 1-1 to understand its unique aspects.

We provide customised guidance for Sponsor Licence applications to increase chances of approval.

We assist with maintaining compliance with the UK government’s rules for employing overseas workers.

Our team offers detailed assistance in making any critical changes to the sponsor management system.

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Change of Ownership and Impact on Sponsor Licence

A Sponsor Licence has a number of obligations and one of the main responsibilities is to notify the Home Office of changes that have occurred or are set to happen.

Activities such as a takeover, new ownership or a merger with another firm must be communicated within 20 days of the change. This notification must be given using the Sponsorship Management System (SMS).

When the Home Office is made aware of the change they will get in touch to request further information and may ask for supporting paperwork to be submitted.

As a business owner, if you fail to inform UK immigration authorities of the change then you could face significant enforcement and it could have an impact on the employees that are currently sponsored via your licence.

Reach out to our immigration team for assistance. Whether you are merging a business, or anything else, it can be a very complex process. Get help from us.

What Ownership Changes Need to Be Reported?

As a UK Sponsor Licence can not be transferred between organisations it is important to identify how any changes in ownership may have consequences for an employer and the day-to-day running of the business.

The following changes in ownership must be notified via the SMS within the required timeframe:

Complete change in owner of the business
The operation is being split into more than one company
The firm is being acquired by another organisation or has taken over another company
A controlling number of shares have been sold

If any of the above occur then this will lead to the existing Sponsor Licence being cancelled or marked as “dormant”. The new owner will have to apply for a new Sponsor Licence and pay the associated application fees.

For guidance in applying for a UK Sponsor Licence then reach out to IAS for support in understanding the application process and how to successfully receive a Sponsor Licence.

What Documents Are Needed For A Sponsor Licence Change of Ownership?

Once the Home Office has been notified of a change of ownership via the SMS, it is likely they will request further information about the nature of the changes and the potential impact on the current workforce.

You may be asked to provide the following paperwork if applicable:

Employment contracts of all sponsored workers and confirmation that their roles and working arrangements will remain unchanged.
A copy of the purchase agreement
Proof of the sale such as confirmation from a lawyer or an affidavit.
The TUPE agreement or a similar contract covering the transfer of sponsored workers
Letter from the Sponsor Licence holder’s authorising officer to confirm responsibility for all new sponsored employees.

Will Sponsored Employees Lose Their Sponsorship?

In most cases, the new owners of the business will be able to protect the immigration status of existing workers in advance of the sale being completed but it will depend on the individual circumstances of each employee.

UK employment law offers protection to workers when their employer is changed or mergers with another business. The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) means that a qualifying worker will have their current job role, and existing terms and conditions, transferred to the new company.

As long as the new owner has a valid Sponsor Licence and confirms via the SMS they are willing to take responsibility for the employee then a change of employment application does not need to be submitted by the worker.

However, any workers who do not qualify for TUPE status will need to apply for a change of employment approval and receive a new Certificate of Sponsorship before they can legally work for the new employer.

If you are considering acquiring a new business or becoming the controlling owner of an existing organisation then you should seek legal advice on how best to ensure you employ workers with the correct Right to Work status and comply with UK immigration law.

Sponsoring Workers from Other Companies

If your business decides to merge or take over another business then you will need to ensure you follow Sponsor Licence compliance rules. If you do not have an existing Sponsor Licence then you must apply for one within 20 days.

For companies that do have an existing Sponsorship Licence for the type of workers employed by the business then they must confirm they are taking responsibility for the other company’s workers within 20 days.

It is important for any firms that are taking on another firm’s staff to ensure they request the previous Sponsor Licence is registered as dormant with the Home Office. This means they will be able to assign any new details for the workers via the SMS system.

Whatever your employment queries as a business owner are, IAS can provide tailored advice.

How Can IAS Help?

At IAS we can help your business ensure it complies with obligations of being a Sponsor Licence when there has been a change of ownership.

Our team can provide support if you are an existing Sponsor Licence and need to transfer your employees to a new owner. Equally, we can give advice if you need to apply for a new Sponsor Licence because you are assuming responsibility of workers due to the purchase of an existing organisation.

In addition, we have a specialist team able to carry out a mock compliance visit to ensure you are ready for a visit from the Home Office if necessary following a change in business ownership.

Whatever your employment queries as a business owner or employer, IAS can provide tailored advice to help ensure you are following the current UK immigration laws. Call us on +44 (0)333 414 9244 for a consultation or get in touch online.

We offer immigration advice sessions as face to face appointments at our Lagos office, all of our UK offices, or via the phone.

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Written by Immigration Advice Service

Ono Okeregha

Director – Immigration Advice Service

Ono Okeregha is the director of the Immigration Advice Service. He is a committed human rights and immigration lawyer. He was awarded the IoD North West SME of the year award and commended for his work in equality, diversity, and inclusion.

Legal Disclaimer

The information provided is for general informational purposes only and does not constitute legal advice. While we make every effort to ensure accuracy, the law may change, and the information may not reflect the most current legal developments. No warranty is given regarding the accuracy or completeness of the information, and we do not accept liability in such cases. We recommend consulting with a qualified lawyer at Immigration Advice Service before making any decisions based on the content provided.

Frequently Asked Questions

Yes, you must notify the Home Office via the SMS that there has been a change of ownership. They will then be in touch to find out further details about the next steps needed to ensure compliance with Sponsor Licence obligations.

A UK Sponsor Licence is granted to employers in the UK to allow them to sponsor and employ individuals from overseas. It is a legal requirement for all businesses and organisations to have a licence if their workforce includes foreign workers

If a business is found not to be meeting the duties of being a Sponsor Licence holder then there are several legal repercussions. It is the duty of a licence holder to ensure they are preventing illegal working in the UK.

Not carrying out the required Right to Work checks for employers could result in a £20,000 fine per breach of the law.

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