Business Law: Competition law applies to small firms too, warns Victoria Judge of Gotelee Solicitors - East Anglian Daily Times Business Law: Competition law applies to small firms too, warns Victoria Judge of Gotelee Solicitors - East Anglian Daily Times

Wednesday, May 30, 2012

Business Law: Competition law applies to small firms too, warns Victoria Judge of Gotelee Solicitors - East Anglian Daily Times

Business Law: Competition law applies to small firms too, warns Victoria Judge of Gotelee Solicitors - East Anglian Daily Times

YOU might think that competition law only applies to large business and does not affect your business. But you might be wrong.

Whenever your business deals with its competitors, there are competition law issues that you need to consider.

Competition law applies to all companies and is designed to ensure that companies compete fairly with each other. Failure to comply can have serious implications for your business, including large fines. Certain serious breaches of competition law may also expose an individual to the risk of criminal prosecution. Businesses can also be exposed to claims that may exceed any fines imposed on them.

All forms of cartel activity are strictly prohibited regardless of the size of your business. A “cartel” describes any organisation or arrangement between at least two competitors that is designed to reduce competition between them and so increase prices or profitability beyond the level that could be achieved competitively. The main examples of cartel activity are:

n Price fixing. Any understanding or agreement about price levels or increases can constitute price fixing. Even a statement to a competitor like “we intend to increase prices next year”, can constitute unlawful price fixing.

n Bid rigging. This is when companies agree the outcome of a tender or pitch process amongst themselves. Bid-rigging eliminates fair competition from the process, removes the customer’s free choice and will almost certainly lead to the customer paying higher prices.

n Market sharing. This may involve an agreement to allocate particular customers or sales territories to individual cartel members.

Your business must not agree to share confidential or commercially sensitive information with competitors such as prices, customers or sales information.

Some forms of information exchange may be permissible, for example if the information provided has no value in predicting future commercial behaviour, or is anonymised, aggregated, etc.

Sales or production quotas are often used to control the market position of cartel participants and maintain artificially high prices.

To be safe, always take legal advice before any co-operation with competitors that may reduce competition and breach competition law. Competition law is easy to fall foul of. If you become aware that your business is involved in any cartel activity, or you are approached by a competitor to participate, you should take legal advice immediately.

Investment: Put the money where the mission is - ThirdSector
Investment illlustration

Investment illlustration

Ethical investment has grown enormously in recent years and is now central to many charities' policies - but some large ones believe it will damage their financial returns. David Ainsworth examines the state of play

Just over 20 years ago, the Bishop of Oxford launched a court case against the Church Commissioners, the investment arm of the Church of England, saying that he felt a charity had a duty not only to maximise financial returns when investing, but also to take ethical considerations into account.

The bishop won his case and, consequently, the Charity Commission rewrote its guidance to make it clear that a charity could exclude from its portfolio any companies to which it had moral objections.

The Church Commissioners, which manages more than £5bn, took the bishop's views to heart and now has one of the strictest policies of that sort anywhere in the UK. It excludes companies that sell tobacco, alcohol, pornography and weapons.

Since that case, ethical investment has evolved considerably. Charities and other investors have moved on from simply excluding those companies they dislike, known as 'negative screening'. When investing in companies, many now take into account the quality of their environmental, social and governance policies, or seek out companies that align with their mission.

Some have used their powers as shareholders to lobby companies for change, while others have stepped outside the mainstream stockmarket to invest only in organisations that actively work for social good - a process known as 'social investment' or 'programme-related investment'.

However, the level of interest in ethical investment varies widely from charity to charity, says Richard Jenkins, policy officer at the Association of Charitable Foundations, who recently compiled a guide called The Governance and Financial Management of Endowed Charitable Foundations.

"We spoke to a lot of charities about this when we compiled the guide," he says. "We found an enormously diverse range of responses. Some charities weren't doing it at all. Others were extremely involved."

A survey in 2009 of 164 Charity Finance Group members by the group and Eiris, a not-for-profit organisation that conducts research into ethical investment, found that 60 per cent of organisations that invested more than £1m had some sort of ethical investment policy. Of those, a quarter went further that just negative screening.

Victoria Heath, head of business development at Eiris, says she believes the focus on ethical investment has increased in the three years since that survey was published. But some large charities still deliberately do not adopt the policy, she says, because they fear it will limit returns.

"For me, it's a no-brainer that you should invest in line with your mission because, if you don't, you're probably investing in someone whose actions run directly contrary to that mission," she says. "But some very big charities are not doing that. They say clearly on their websites that they invest to maximise return."

Heath says one common reason given by those that do not have ethical investment policies is that trustees still believe they have a legal duty to maximise returns, and that it is unlawful to exclude investments on moral grounds. Others believe that ethical investment will damage their returns.

Others, she says, shy away because the process of developing an ethical investment policy is seen as time-consuming and difficult. "But it's not illegal, and it won't negatively affect your returns," she says. "It's possible to develop a policy relatively simply."

Jenkins says that evidence gathered while compiling his guide suggested that ethical investment is moving up foundations' agendas. One reason for this, he says, is the publication of guidance that makes it clear that charities can invest ethically, notably the Charity Commission's investment guidance CC14, published last year. He says this gives charities "a really pragmatic and permissive power to invest in ways that are relevant to their beneficiaries".

The UN Principles for Responsible Investment, launched in 2006, have also highlighted the issue to all investors. "I think the financial crash also made a difference," says Jenkins. "I'm sure it's made people think about whether their money is really doing what they want."

Above and beyond that, he says, there is an increasing move among foundations towards 'whole-balance-sheet investing'. "Foundations are thinking about how they can use every penny at their disposal to achieve their objectives," he says. "But there's always a delicate balance between the extra good you can do with your investments and the good you can do with the extra investment return."

Helen Wildsmith, head of ethical and responsible investment at the fund manager CCLA, says that the move towards ethical investing appears to be one-way traffic. "I've never heard of anyone abandoning their ethical investment policy once they've got one," she says. "It only moves in one direction."

Wildsmith says all money managed in CCLA funds is subject to some form of ethical screening. "We have two policies," she says. "One of those excludes tobacco and weapons banned by international treaty; the other has much more extensive screening. The first excludes about 3 per cent of the market, the second about 10 per cent.

"But what we're also finding is that charities aren't interested in exclusions only. Our clients have told us they want us to be engaged investors, and to use their shares to vote on issues such as human rights and child labour. And if engagement doesn't work, they've told us to divest."

In one high-profile case, charities sold their shares in protest about poor conduct by the mining company Vedanta. A coalition of church investors, including CCLA, the Central Finance Board of the Methodist Church, the Joseph Rowntree Charitable Trust and the Church Commissioners, put pressure on the company over its plans to mine a sacred mountain in India, and eventually sold their shares in protest.

Edward Mason, secretary to the Church of England ethical investment advisory group, who took part in the divestment process, says that getting involved in ethical investment can look complicated at first, but "you shouldn't throw your hands in the air and do nothing".

He says: "There are plenty of organisations that can help. The guidance is very good. You can ask your fund manager what they can do for you. Managers respond to their clients. If enough clients ask them for something, they'll do it.

"The evidence isn't entirely clear that there's an active investment benefit, but it's pretty clear that there's no detriment. And it's a good investment process to take into account issues that could affect the stock in the long term."

Gemma Woodward, an investment manager at the fund management company Newton, says that taking account of environmental, social and governance issues - known as ESG for short - is simply good financial management, as well as having an ethical benefit. "Our belief is that ESG factors affect share price and you need to understand them," she says. "We think looking at ESG is integral to good investment processes, particularly over the long term."

Woodward says another reason to have an ethical investment framework is the wishes of supporters. "There's a clear indication that supporters feel charities should have ethical investment policies," she says.

"Once you've developed a policy, test it. Find out where your concerns are. Make sure it's really doing what you want it to. It can be quite a lot of work to set up, but it's not that hard to run."

- Read our interview with the head of Panahpur, James Perry

- See our article on the new guidance for charities on social investment

- Check out our case study about the Esmee Fairbairn Foundation's investment strategy

STOCKS NEWS EUROPE-'Death cross' triggered on Euro STOXX 50 - Reuters UK

Wed May 30, 2012 9:39am BST

Charts show the blue chip Euro STOXX 50 index's 50-day moving average crossing below the 200-day moving average in early trading on Wednesday, a strongly bearish technical signal called 'death cross', which usually means further losses in the index six months down the road.

"This confirms the current medium-term trend, and at the same time, there isn't any sign whatsoever of a trend reversal for European indexes, so it's crystal clear that this downtrend is set to continue," saiys Vincent Ganne, technical analyst at TradingSat, in Paris.

The Euro STOXX 50 index last week halted a sell-off started in mid-March during which it plunged 19 percent, and has been testing its downward trendline over the past two sessions, but it failed to close above it, sending a negative signal.

"For most European markets, last week's bounce was quite weak and so far the move has been developing into a sideways pattern, which has a corrective and therefore a bearish character in the bigger picture," Michael Riesner, head of equity technical analysis at UBS Investment Bank, writes in a note.

"Even if we should see a temporary extension of the current bounce early this week, given the weak patterns and structures in the market, we continue to see the risk of at least one more down leg into June, which still suggests prices below 2,100 in the Euro STOXX 50."

The index's next big support level is at 2,066 points, which represents a low hit in late November.

Reuters Messaging:

Business and pleasure travel write-offs - Yahoo Finance

Taxes » Tax Deductions » Tax Help For Business, Pleasure Trips

You really need a break, but it's been a tough year for your business and you're not comfortable spending money on vacation travel. Let Uncle Sam help pay for your business trip. When you tack on personal vacation days to the beginning or end of a business trip, your out-of-pocket costs could be minimal since much of the business portion of your travel could be tax-deductible.

The pairing of corporate and vacation travel is easier for self-employed business owners. But employees also can take advantage of combined personal-business trips.

The key, as with anything tax-related, is substantiating that you followed IRS rules.

Ordinary, necessary expenses

The IRS has no problem with business owners deducting legitimate expenses. As long as the travel benefits or advances your business, you can write off ordinary and necessary expenses.

What's considered ordinary and necessary? That depends, says the IRS, on the facts and your circumstances. In general, an ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your business.

Under these standards, deductible travel expenses typically include hotels, meals, entertainment and round-trip travel to meet with existing or potential out-of-town clients.

Convention and seminar costs also could be deductible as long as the conferences specifically relate to your business or profession or help improve your career skills. That's why so many professional groups hold conventions in vacation spots like Orlando, Fla., or Las Vegas.

Getting there

Traveling to a business meeting obviously is work-related and the IRS doesn't really care whether you get there a few days early or hang around for a bit after your business is concluded.

Since you had to travel anyway, you can deduct the cost of your transportation as a business expense when you file your company's taxes. This applies to both auto travel as well as airfare.

"If the primary purpose is business, you don't have to apportion it even if you spend some personal time," says Barbara Weltman, tax attorney and author of "J.K. Lasser's Small Business Taxes 2012."

In fact, when you fly for business purposes and extend your stay to get a reduced fare by, for example, spending a Saturday night at your destination, the associated stay-over costs usually are deductible, too, even though you have no business meetings that extra day.

The cost of travel by bus, train or auto, either your own car or one you rent, also is deductible. But don't try to slip in the price of airfare if you got your ticket via frequent flier miles.

Timing is everything

Many people set up out-of-town meetings for late one week and early the next. "That basically requires you be in town, but you have the weekend to yourself," says Maria Mercedes R. Infante, an Orlando, Fla.-based CPA.

Be sure, though, that you don't extend your personal stay too long. In order to deduct your transportation costs, your trip must be primarily for business. You do get to count your travel days as business, but carefully calculate the overall work-to-pleasure ratio.

If you spend three days getting to and meeting with clients, but bookend the travel with five extra days for sightseeing, the IRS will consider your trip more for fun and disallow your travel deductions.

Lodging costs

Your hotel costs while conducting business also are deductible. Here, too, you need to differentiate between the portion of your stay that was personal.

For the extra days you stay to enjoy a location's recreational offerings, you cannot deduct those hotel charges.

Don't try to get cute here. The IRS frowns on counting a full day as business if you simply schedule a quick breakfast meeting with a client and then spend the other 23 hours on your own. In this case, that night's lodging will come out of your own pocket, not as a deduction on your tax return.

Eating out

Speaking of eating, closing a deal over a meal is a time-honored business practice, but the IRS only helps out so far here.

Generally, you can only deduct 50 percent of your business-related meal costs. That limit also applies to your individual meals on business travel.

As for that breakfast business meeting, it isn't a total tax loss. Even though it isn't likely to get you the full day for lodging deduction purposes, you can include the morning meal's costs -- subject to the 50 percent limit -- with your client as a deductible expense.

Miscellaneous expenses

When collecting your travel, hotel and meal receipts, be sure to note other miscellaneous expenses, too. Many of these work-related costs also are deductible.

You can write off taxi fares to and from the airport (or other transportation hubs, such as a train or bus station), as well as local fares from the airport to your hotel. And don't forget the cab costs from your hotel to your business meetings (and back).

If you shipped work material to your meeting destination, that expense is deductible. So are the extra charges you incur for business calls while on your trip, as well as Internet connection fees.

If your trip lasts longer than you planned, dry cleaning and laundry fees paid to make you look presentable also are deductible.

Taking family along

If you want to make a real mini-vacation out of your next business trip, take the family along. Just be prepared for more diligent record keeping.

Your spouse's and children's expenses won't be deductible unless they work for your company and are involved in the out-of-town business meetings. The tax code will, however, pay for at least part of your expenses. In some cases, that could be more than you expect.

Take lodging. When you share a room, the charge for added occupants typically is not double the fee for one guest. That means that for the days you conduct business, most of your family-shared room will be deductible.

And while only your airfare is deductible if you fly, when you drive to your out-of-town meetings, the mileage is fully deductible even with your family along for the ride, says Weltman.

It also works for employees

If you are an employee, you also might be able to take advantage of company travel for a bit of a personal break.

"Make sure you follow the company policy," says Infante, who previously worked in the finance offices of several large corporations. This means keeping receipts and documenting the business portion of the travel, she says, since many firms base their employee travel policies on tax code guidelines.

Also keep in mind that the rules are somewhat different when business travel is outside the United States. In those cases, you still might be able to deduct some travel expenses, but check with your employer or your own company's tax adviser beforehand to ensure that the trip abroad goes smoothly on personal, business and tax levels.

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US STOCKS - Wall St stumbles as euro zone worry grows - Reuters

Wed May 30, 2012 10:10am EDT

* Spanish, Italian yields rise on euro zone concerns

* New Greek election poll shows leftist SYRIZA has taken lead

* European Commission calls for banking union

* Research in Motion tumbles in premarket

* Indexes off: Dow 1.1 pct, S&P 1.2 pct, Nasdaq 1.4 pct

By Chuck Mikolajczak

NEW YORK, May 30 (Reuters) - U.S. stocks dropped on Wednesday, as rising bond yields for Italy and Spain and the latest poll results in Greece worsened fears about a spiraling of the euro zone's debt crisis.

The region's fiscal woes sent the yield on the safe-haven 10-year U.S. Treasury note to the lowest in 60 years and the euro to its lowest level in 23 months against the dollar. U.S. equities have been closely tethered to the currency's fortunes, with a 50-day correlation between the euro and the S&P 500 index at 0.91.

"The longer they (Europeans) drag it out, the less severe are the ramifications of a break-up and then who actually ends up exiting - so much of this is unwritten it is hard to put any sort of odds on how this plays out," said Nathan Snyder, portfolio manager at Snow Capital Management in Sewickley, Pennsylvania.

Yields on 10-year Spanish bonds moved closer to the 7 percent level, a point at which other nations in the bloc were forced to seek a bailout.

Spain is expected to issue new bonds shortly in an effort to fund its troubled banks despite the increased borrowing costs.

Adding to the concern, Italian 10-year yields topped 6 percent for the first time since January at a bond sale, raising concerns the region is vulnerable to a contagion.

Investors were given cause for optimism after the European Commission said the the euro zone should move toward a banking union, consider eurobonds and the direct recapitalization of banks from its permanent bailout fund as well as boost growth and cut debt.

But the cheering was short-lived after the latest poll from Greece showed the radical leftist SYRIZA party has taken the lead over the pro-bailout conservatives ahead of a national parliamentary election next month that may determine whether the debt-laden country stays in the euro zone.

"It seems inevitable the euro has got to break up, it's just how long can they drag it out and what are the ramifications," said Snyder of Snow Capital Management.

The CBOE Volatility index jumped more than 10 percent, it's biggest spike since mid-April.

The PHLX oil service sector dropped 2.9 percent with U.S. crude down more than 2 percent as the euro zone's debt problems and signs China was not planning a large stimulus package stoking demand fears. National Oilwell Varco Inc lost 2.6 percent to $68.19.

European shares were buffeted by the conflicting headlines, with the latest Greek poll pushing the FTSEurofirst 300 index down more than 1 percent.

The Dow Jones industrial average dropped 135.21 points, or 1.07 percent, to 12,445.48. The Standard & Poor's 500 Index lost 16.32 points, or 1.22 percent, to 1,316.10. The Nasdaq Composite Index slumped 40.97 points, or 1.43 percent, to 2,830.02.

U.S. economic data showed contracts to purchase previously owned U.S. homes unexpectedly fell 5.5 percent in April to a four-month low, dealing a blow to more recent optimism the housing sector may have hit a bottom.

Research In Motion Ltd tumbled 10.6 percent to $10.05 as the biggest percentage decliner on the Nasdaq 100 index. The company hired bankers for a far-reaching strategic review and to look for partnerships as the BlackBerry-maker warned it would likely report a shock fiscal first-quarter operating loss.

Apple Inc slipped 0.9 percent to $567.14 after Chief Executive Tim Cook, speaking at the All Things Digital conference said technology for televisions was of "intense interest" but stressed the company's efforts would unfold gradually amid speculation the iPad and iPhone maker was on the brink of unveiling a revolutionary iTV.

Macy's Inc reported better than expected May same-store sales on Wednesday, helped by its growing e-commerce business. Shares slipped 2.9 percent to $37.86.

Pep Boys-Manny, Moe & Jack plunged 21.7 percent to $8.68 in premarket after the automotive parts and service chain said the sale of the company to private equity firm Gores Group has been called off.

Money Advice Group secures £10million from PNC -

Money Advice Group, one of the UK’s leading financial solutions companies, is embarking on a comprehensive growth strategy after securing an asset based lending facility worth £10 million, with PNC Business Credit.

In conjunction with, Dow Schofield Watts, Money Advice Group negotiated the credit facility to enable continued growth through a combination of working capital funding and finance for acquisitions.

Boasting a solid 10-year heritage, Money Advice Group currently holds approximately 8% market share of the fee charging financial solutions industry, with a turnover of £15million. Handling £250million of consumer debt, the financial solutions company has 28,000 clients that it hopes to grow by a third, with the help of the cash reserve from PNC.

Money Advice Group’s expansion plans have been stimulated by increased attention from the Office of Fair Trading (OFT), resulting in a compliance review in 2011, which saw a significant number of debt management companies either voluntarily exit the market or be forced to close due to lack of compliance. No longer open to flexible and often lax regulations, the debt management industry is now governed by the OFT’s more stringent ‘Debt Management Guidance’ published in March 2012 – and the enforcement of such has led to an industry trend of consolidation. This has created significant opportunities within the industry for larger players, with the potential to gain more market share by assisting those smaller players who wish to exit completely or sell their book of customers, in light of the cost associations of becoming compliant.

Money Advice Group’s proactive stance has allowed it to anticipate this shift in the debt management industry, and prior to its partnership with PNC, had self-funded an exercise in acquiring a small player exiting the market. The success of such a venture was the catalyst for its ambitious plans for growth and prompted the discussions with PNC to facilitate an acquisitions strategy.

The agreement with PNC is part of Money Advice Group’s overall expansion plans, which will see it take on an additional 3,500 feet² of office space within its existing premises, and boost its workforce with several new appointments within the management and client services teams. Money Advice Group has already recruited 60 members of staff in order to facilitate expansion, bringing the company workforce to 285.

Simon Brown, Managing Director, Money Advice Group commented: “With the introduction of more stringent compliance guidelines than our industry has ever witnessed, we spotted an opportunity in the market. We are extremely proud of our compliant culture but the costs associated with becoming compliant are too excessive for some of the smaller players, so what we find is they want to exit altogether or just sell on some of their books or assets. We trialed this approach last year with the successful acquisition of a smaller company, and it was from this we saw a clear direction for Money Advice Group.

“Our decision to work with PNC stemmed from its reputation in this arena, and its innovative approach to facilities based on loan to value rations against specific assets. This offered a more substantial funding line, enabling us to take advantage of the opportunities in the industry – specifically acquiring both medium-sized and large competitors, and to expand into new markets.

“We have ambitious plans for expansion and growth, and the partnership with PNC has assisted us in realising these plans. We look forward to continuing the working relationship with PNC Business Credit.”

Mark Shackleton, PNC Business Credit said: “Money Advice Group has the infrastructure, industry knowledge and experience to facilitate steady growth through acquisition.  There is a clear strategy to grow the business and we are pleased to be adding Money Advice Group to our growing portfolio of clients”.


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