Business Structure Change Impact on Sponsor Licences

Business Structure Change Impact on Sponsor Licences

Companies holding a sponsor licence must be vigilant about the implications of any changes in business ownership or structure. Such changes can profoundly affect your sponsor licence and the status of sponsored migrants.

When granted a sponsor licence, fulfilling sponsor duties, such as reporting and record-keeping, is essential.

This article explores the types of business structure changes that can impact your sponsor licence and what steps need to be taken.

Types of Changes in Business Structure

A sponsor licence is non-transferable. Here are key changes in business structure to be aware of:

• Change in direct ownership

• Sale of all or part of controlling shares in the organisation

• Partial or full takeover by another organisation

• Business split to form new organisations

Reporting Duties for Sponsor Licence Holders

The Level 1 User in your organisation must report any significant changes via the Sponsorship Management System (SMS) within 20 working days.

Consequences of Failing to Report Changes

Failure to report these changes within the stipulated time may result in the downgrading or revocation of your sponsor licence.

This might prevent you from sponsoring more workers, and current sponsored workers may have their permissions cancelled or shortened.

Complete Takeovers and Mergers

New Sponsors

If your company has taken over or merged with another organisation:

• No sponsor licence? Apply for one within 20 working days.

• Existing licence but not in the relevant category? Extend the scope of your licence.

• Existing licence? Apply for an increase in your Certificate of Sponsorship (CoS) allocation via SMS.

• Report changes via SMS for workers you have taken responsibility for.

• Request to make the previous sponsor’s licence dormant.

Old Sponsors

If your organisation is taken over:

• Report changes via SMS within 20 working days.

• If any sponsored workers are not moving to the new sponsor, report it via SMS.

• To surrender your sponsor licence, do so through your SMS account or via a change of circumstances form if no Level 1 User is available.

Partial Takeovers and Mergers

New Sponsors

• Apply for a sponsor licence within 20 working days if you don’t have one.

• Use SMS to increase your CoS allocation.

• Report changes via SMS, including workers you have accepted responsibility for.

Old Sponsors

• No sponsored migrants? Report and surrender your licence via SMS or a change of circumstances form.

• Sponsoring workers? Report which workers are moving and amend your CoS allocation via SMS within 20 working days.

Change in Direct Ownership

A change in direct ownership will result in licence revocation. When sponsored workers move to another organisation with a sponsor licence, your licence will be made dormant. Changes can occur due to a complete sale or transfer of controlling shares to a new owner.

Employees Transferred Under TUPE

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) protect employees during business ownership changes or service provision changes.

Impact on Sponsored Workers

When TUPE is triggered, jobs and terms remain unchanged and transfer to the new company.

If the new employer has a valid sponsor licence and accepts responsibility for the workers, their duties remain unchanged, negating the need for a change of employment application or new CoS assignment.

Steps for New Sponsors:

• Confirm responsibility via SMS if holding a sponsor licence.

• Apply for a sponsor licence or extend the scope within 20 working days if you do not have one.

• Failure to apply within this timeframe or if the application is refused may result in the cancellation of workers' permissions.

Your Next Step

Navigating business structure changes while maintaining your sponsor licence can be complex and stressful. At Worldwide Immigration, we offer expert, compassionate legal guidance to ensure you comply with all requirements and safeguard your sponsored workers.

Speak to one of our immigration lawyers today at 44 - 0203 4882 308, email us on Email: info@worldwideimmigration.co.uk or complete our enquiry form on our website.

Allow us to alleviate your legal challenges, ensuring a seamless transition for your business and your sponsored workers. Reach out to Worldwide Immigration and take the first step towards stability and success.