If you read this carefully you'll notice this story is presented back to front.
>revenue must not have involvement with "connected parties."
>disclosed that two of my shareholders also worked at companies that were customers
...and surprise surprise the revenue gets disputed. Disclosing things doesn't invalidate pieces of the contract - if anything it strengthens it given solid evidence to the opposing party here.
That's it. End of story. And yes, good advice - lawyers may have saved this.
The rest reads like the result of a desperate laymans search for anything that might back an alternate interpretation....absolutely anything that might get these two obviously excluded revenue pieces back into scope. To call it a longshot would be generous:
>Had the "C" in "connected parties" been capitalized, it would have fallen under the HMRC Taxation of Chargeable Gains Act, which in the UK formally defines a Connected Party as a person who has control of a company, which was not the case with either of my shareholders.
Why would UK tax law definitions have any bearing on interpretation of what revenue is in scope for a valuation calculation?
But lets assume it somehow is via some unnamed mechanism. The act doesn't even mention "Connected Party" let alone define it. It does talk about connected persons but you'd need to squint pretty hard to turn party in persons via a capital C...and ignore the minor detail about it dealing with tax matters not M&A matters.
I'm gonna go out on a limb here and say there was no lawyer involved in the capital C part of the story at all.
I'm gonna go out on a limb here and say there was no lawyer involved in the capital C part of the story at all
Agreed. If "Connected Persons" in the UK tax law was intended to govern the contract's interpretation, that would have been explicitly called out in the contract. (Note: in the U.S., M&A law is part of tax law, but even in this context it is understood that a term has its common/dictionary meaning unless the language of the agreement specifically states that a statutory or regulatory meaning is intended.)
But also, capitalization isn't generally relevant for determining whether a noun refers to a defined term or not; for example "Connected Persons" "connected persons" and "CONNECTED PERSONS" are all read the same, unless there is something in the contract that specifically states otherwise. It used to be common for the first usage of a defined term to be all caps.
This story reads like someone thought they could save money by not having a (subject-matter competent) lawyer review everything and it came back to bite them in the ass.
> But also, capitalization isn't generally relevant for determining whether a noun refers to a defined term or not; for example "Connected Persons" "connected persons" and "CONNECTED PERSONS" are all read the same, unless there is something in the contract that specifically states otherwise. It used to be common for the first usage of a defined term to be all caps.
In my experience it is a common convention in UK law contracts for defined terms to have the first letter in each word capitalised whenever they are used.
Completely agree with the broader point though - capitalising a term that happens to be defined in some legislation somewhere doesn't generally mean it has the same meaning as in that legislation unless explicitly linked to the legislation.
This whole story with the „c“ smells like bs to me.
Your conclusion sounds more believable than his story, it was not the capital c that maybe cost him thousands of pounds, but that his lawyer is incompetent or did not even exist.
It sounds like a justification to himself, that this could have happened to anybody and it’s just bad luck, but in reality he f*cked up and it was preventable.
>revenue must not have involvement with "connected parties."
>disclosed that two of my shareholders also worked at companies that were customers
...and surprise surprise the revenue gets disputed. Disclosing things doesn't invalidate pieces of the contract - if anything it strengthens it given solid evidence to the opposing party here.
That's it. End of story. And yes, good advice - lawyers may have saved this.
The rest reads like the result of a desperate laymans search for anything that might back an alternate interpretation....absolutely anything that might get these two obviously excluded revenue pieces back into scope. To call it a longshot would be generous:
>Had the "C" in "connected parties" been capitalized, it would have fallen under the HMRC Taxation of Chargeable Gains Act, which in the UK formally defines a Connected Party as a person who has control of a company, which was not the case with either of my shareholders.
Why would UK tax law definitions have any bearing on interpretation of what revenue is in scope for a valuation calculation?
But lets assume it somehow is via some unnamed mechanism. The act doesn't even mention "Connected Party" let alone define it. It does talk about connected persons but you'd need to squint pretty hard to turn party in persons via a capital C...and ignore the minor detail about it dealing with tax matters not M&A matters.
I'm gonna go out on a limb here and say there was no lawyer involved in the capital C part of the story at all.