Today’s world strives to adapt to continue functioning, retain economic stability and society’s welfare.

In this new reality, businesses are in a high anxiety state and undertake intensive actions to secure their staff and retain business relations with clients, shareholders, stakeholders, and partners.

Even though the crisis is critically affecting our way of life, there are intricate business alerts that entrepreneurs should not neglect and seek ASAP the assistance of professional legal advisors and consultants to confront them successfully.

Business Alerts

Business Endurance

Businesses should form an effective business continuity plan with strategies that target the business’s continuation.

Professional legal assistance is needed when forming the business continuity plan to safeguard that the business fully complies with the legislative framework, i.e.:

• contractual relationships
• employment contracts
• compliance of the industry with its obligations before governmental authorities
• business relationships of company’s affairs with employees, clients, suppliers, shareholders, and stakeholders.

Business Insurance Coverage

In today’s business environment, many companies have business insurance coverage plans.

Consequently, the company’s legal advisors should thoroughly examine the insurance policies and coverages to identify if compensations for the COVID – 19 pandemic exist.

It is noteworthy to mention that all insurance contacts are subject to high variations when coverage policies and exemptions are concerned.  Chambersfield Economides Kranos lawyers can evaluate your business insurance contract and identify possible coverages according to the contractual and related pandemic litigation, as well as determine the coverage percentage of the cause.

Employment Law

Almost all the governments of the world, during the pandemic outbreak, issued supportive measures and degrees to safeguard business operations, social welfare and prevent mass layoffs.

Moreover, governments issued a safety and security degree for tackling the pandemic effects and provide a healthy, hazard-free workplace environment to all employees.

Despite the government’s efforts, many people have wrongly or unfairly being dismissed from their employment. Unfortunately, many of them were unaware of legislative and/or regulatory provisions aiming to safeguard their legal rights.

An unlawful employment dismissal depends on the individual situation and may violate the Termination of Employment Law, Violation of Constitutional Human Rights, or Breach of Employment Contract.

Subsequently, before proceeding with employment termination, businesses should consult their legal advisors to determine if there is a violation of employment rights.

Privacy and Security

There are many questions concerning network privacy and security on remote work, especially today that social distancing is promoted as a prevention measure of Covid-19 pandemic spread.

Due to pandemic measures, “business as usual” is disrupted, and the vast majority of companies proceeded with the introduction of remote work to maintain their sustainability.

At the same time, the implementation of “working from home” raised safety questions to companies regarding:

• The disclosure of sensitive data processed or saved in the company’s systems,
• Possible unauthorized access or disclosure of data,
• Unsecured Networks that are vulnerable to viruses, malware, etc.

Consequently, companies, to overcome those problems, should assess their policies:

• of remote access in their systems and develop regular risk checks,
• adopt continuous monitor techniques,
• and enhance employees’ security access points by implementing double system authentication techniques and encryptions.

Besides, special attention should be given to employees’ training and system defense mechanisms to prevent spear phishing, whaling, smishing, and vishing that flourish during a crisis.

Concurrently, companies should define their policies for gathering and receiving health-related information about their visitors, employees, and third parties to be fully compliant with the EU General Data Protection Regulations (GDPR).

The needs of each company vary according to the nature of the business operations and activities. For privacy matters and GDPR compliance, it is highly recommended to seek the advice of the professional lawyers of Chambersfield Economides Kranos.

It is noteworthy to mention that companies that do not implement the appropriate measures may face sudden threats and consequences.

Contractual Relationships

The coronavirus pandemic has undeniably affected the world economy and created massive negative impacts on all commercial contacts and activities.  Countless trade contracts were affected, and many business transactions were canceled or postponed.

Also, concerning contractual relationships, the pandemic has raised reasonable questions of who will be accountable and bear the financial losses of not meeting the contract obligations.

Additionally, a wise confrontation should be the implementation of crisis management strategies that will help in minimizing the effects of the outbreak i.e.

• Negotiation attempts will involve parties with suggestions that may solve the problem.
• Implementation of relief strategies
• Formation of a Contingency plan
• Legal risk analysis
• Revision of contract clauses
• Governing law, etc.

It is also highly recommended for overcoming contractual relationship vulnerability to seek the consultation of Chambersfield Economides Kranos, legal and business consultants.

The firm’s legal consultants can help form a crisis management plan, which will contain actions that will safeguard your firm’s contractual relationships and business operations.

Financial Concerns

Many companies and individuals have experienced financial distress for their earnings, cash flow, and loans after the pandemic outburst.

Also, many companies had to appeal for restructuring their contracts and agreements to cope with the pandemic consequences and continue their business operations.

The answer to business sustainability does not lie only with loan restructuring but with overall business restructuring due to Covid-19 unpredictable era effects.

Thereupon, for a successful restructuring of your business, entrepreneurs should appoint legal experts that will perform a thorough analysis of the company’s current situation and propose sustainable solutions.

Merges and Acquisitions

As previously stated, the Covid-19 pandemic has had a significant negative impact on all business activities, not only in nearly every sector of the economy but also on Mergers and Acquisitions transactions.

Many M&A transactions after the outbreak were affected in terms of:

• Financial Risk – due to future uncertainties on the behavior of the economy, in M&A transactions, entrepreneurs have shown hesitation on whether they will proceed with the transaction, cancel, or postpone it.
• Value – The conditions of the international market have changed dramatically.

Nowadays, we observe spontaneous economic tendencies. Therefore,  entrepreneurs are in the process of re-evaluating M&A pricing and risks before reaching a decision.  Also, in M&A re-evaluation, a great emphasis is being given on financial due diligence indicators, i.e., capital funding, continuity business plans, risk management, etc.

• Sustainability – entrepreneurs evaluate possible business sustainability scenarios before proceeding with the M & A transaction.

Additionally, entrepreneurs attempt to identify policies that will ensure the successful continuation of their business operations and mitigate the risks of market fluctuations.

With that said, today’s entrepreneurs are in more need of cooperation with lawyers that have great experience in cross-border transactions, M & A, and crisis management.

Intellectual Property Rights

Intellectual Property Rights have been highlighted even more during the pandemic era.

Subsequently, businesses should find “out-of-the-box” solutions to cope with the pandemic’s effects, which will sustain their operations and create new opportunities.

Several examples demonstrate this thinking in e-commerce, IT, pharmaceutical, etc.

For example, many IT companies seized the opportunity of social distancing and lockdowns and focused on technological developments.  It is a fact that the Research and Development department of Pharmaceutical companies got into the fight for developing vaccinations of immunity towards the coronavirus.

All new developments need to be assessed by the governmental authorities, register their IP rights, and acquire the license before entering the market.

The measures of the governmental authorities, as expected, created delays in the registration process of copyrights, trademarks, and patents.

Therefore, to avoid further procedure delays, it is highly recommended for your IP application and procedure be handled by experienced and accredited law firms.  The professional IP lawyers can provide the appropriate advice during the process, on a national and international level, and overcome any possible delays during the application stage.

E-Commerce

Nowadays, e-commerce is deemed to be the leader of the retail industry. Movement restrictions, lockdowns, and social distancing were the main reasons that contribute to the e-commerce booming induced. As expected, companies that adapted fast to consumer behavior changes thrived.

It is undeniable when it comes to e-commerce, it is of utmost importance to be sure that your online business is compliant with the relevant regulatory and legislative framework.

Several laws pertain specifically and related to online businesses, including but not limited to intellectual property rights (trademarks, copyrights, etc.), privacy policies, terms of service, data protection, and consumer rights.

Therefore, for safeguarding your online business operations, it is recommended to search legal consultants’ advice and seek their assistance with all legal aspects related to online businesses’ formation and function.

The post Legal Considerations in Today’s Businesses appeared first on Chambersfield Economides Kranos.

This question is among the most important queries that suppliers and customers try to answer after the pandemic declaration by the World Health Organization (WHO) on 11th of March 2020.

Undoubtedly, the coronavirus pandemic impact on the global economy and supply chain, heavily disrupted all the business operations and created massive negative effects.

Innumerable trade contracts have been affected by the lockdowns, travel restrictions and factory shutdowns worldwide.

In addition, firms with insufficient product line diversification and companies that followed limited shortage inventory system policies, were among the ones mostly affected, since from the beginning of the pandemic they started to experience significant difficulties and losses of revenue due to inventory shortage.

As we all know, product distribution is highly dependable on the supply chain’s efficiency and effectiveness, especially when cross – border transactions are in place.

It is undeniable that the supply chain industry heavily supports the global GDP.

Therefore, many governments in their attempt to protect their local suppliers have issued thousands of force majeure certificates and notices. The force majeure certificates and notices were used as a defense strategy for local suppliers to be exempted or suspended from their contractual obligations towards overseas buyers, due to the unforeseen and unpredicted conditions that the pandemic caused.

Force Majeure principles describe the out of anyone’s control unexpected events that prevent contractual parties to fulfil their contract obligations i.e. natural disasters, pandemics etc.

Having said that, not every agreement is eligible to be valid under the force majeure doctrine since the clauses included in the contract and governing laws of each jurisdiction, differs.

Consequently, it is advisable, as a sound practice, that all contracts, no matter the nature of the transaction or agreement or jurisdiction, are drafted by experienced lawyers, so as to include the rights and obligations of all parties involved and state the actions that should be followed in the case of a dispute or contract failure.

Thus, lawyers not only will specify the contractual parties’ relationships in the occurrence of a dispute, but they will also add clauses that will specify:

• in which events force majeure actions will come into force
• which party will be responsible for the possible financial losses in each specific event
• the contract governing law
• in which cases is the resolution of the contract acceptable, with no further legal consequences other than the ones specified in the contract etc.

The risks of COVID-19 outburst lie on the inability of businesses to meet their contractual obligations in the event which, the business’ operations are being disturbed by the coronavirus pandemic or governmental restrictions.

Who is accountable for those losses? The supplier, The customer or Both.

Unfortunately, who is held responsible is at fault and who will bear the financial losses when a supplier cannot meet customers’ orders is not a straightforward answer.

In the event of a pandemic outbreak, suppliers should carefully assess their legal contracts clauses and determine which sections apply to the exact event and specify if the conditions stated in the contract provide solutions for this event.

Furthermore, suppliers should examine if the specific event is directly correlated with the cause of not meeting the contract obligations and then examine if the specific cause was the one that affected their performance.

Moreover, suppliers should determine if the force majeure principle can apply on the specific event and examine if the legal framework of the contract’s governing law justifies the reasoning of the force majeure for not meeting contract obligations.

To sum up, everything depends on the contract terms and conditions, as well as the governing law of the contract, since there is no global one-size fits approach for countries.

What is more, suppliers may put into effect additional strategies that will assist them to minimize the consequences of the outbreak and cope with the risks caused by the pandemic.

Suppliers Crisis Management

First and foremost, suppliers should try to negotiate with customers directly and try to identify, as well as suggest possible ways of solving the problems in the supply chain.

Some “relief strategies” that suppliers may adopt are:

• prolonging the lead delivery time to customers
• prioritizing orders according to delivery time requirements per contract
• postponing new incoming orders or extending the proposed delivery time
• allowing cancellations for a short period of time etc.

Second, suppliers should form a crisis management plan that will include amongst others:

• Identification of the problem and analysis of all the reasons that are affecting the supply chain’s performance (i.e. lockdowns, travel restrictions, quarantine, staff illness, governmental restrictions etc.) It is extremely important for suppliers to document all the reasonings and determine which whys disturb the supply chain’s flow and how those causes affect the supply chain’s performance at all levels, so as to be able to proceed with the correct management decisions and avoid contracts terminations and minimize financial losses.
• Recognition and legal analysis of the risks involved, in accordance with the contract clauses and contacts governing law.
• The formation of outsourcing agreements with affiliate suppliers situated in operational areas, not heavily affected from the pandemic. With this “mitigating risk strategy”, suppliers may be able to support their production and overcome the supply chain problem for a short period of time.

Third, when suppliers have exclusivity contracts with customers, it is highly recommended to review those contracts with great caution with their legal associates and give emphasis to the clauses of delays, delivery failure, force majeure, reasons for contract termination etc.

Last but not least, suppliers in cooperation with their legal associates should review very carefully the dispute resolution section of their contract with customers and/or affiliates, so as to determine their legal rights and be in the position to negotiate.

Supply chains are amongst the most vital, complicated thus advanced industries of the world that allow minimum delays and disruptions, due to cost and inventory optimization policies by the companies.

Serious disturbances, i.e. coronavirus pandemic, may result to massive losses around the globe and serve as a tricker point of a global economic recession.

Therefore, suppliers by acknowledging the vulnerability of the supply chain industry should seek the consultation of legal and business consultants to assist them in forming a crisis management plan that will include reasonable solutions with immediate enforcement, so as to safeguard their companies’ operations and future.

The post Covid-19 and Supply Chain Breach of Contracts. Who is accountable? appeared first on Chambersfield Economides Kranos.

In the last few years the term “StartUps” has become quite popular, despite the fact that this business model first appeared in 1950s.

“StartUps or Young Entrepreneurships” are newly established enterprises which offer innovative ideas, aim at extremely fast business development and reach a wide audience.

Their main goal is to create a model that can evolve and repeat itself.

Due to the above-mentioned characteristics, a large percentage of these companies originate from the field of technology aiming at the dynamic development of an existing idea or the creation of an innovation that will satisfy a new need.

Based on our experience, the past has repeatedly demonstrated that there is no “secret recipe for success”. Each case is different and unique, it accepts either positive or negative influences from the various changes and fluctuations that occur in the domestic and international market, as they result from the political, economic, social, technological, environmental and legal framework.

Due to the complexity of the aforementioned factors as they arise from the markets, especially from the legal perspective, it is important for StartUps companies, from the conception of the idea until its realization, to cooperate with a law firm specializing in company and business law. Embracing this approach, you directly ensure the protection of the newly established company, the implementation of the correct procedures and due diligence on the points of cooperation. It also prevents uncertainties on terms and conditions, while providing legal and business advices at every stage of the business development.

Although each case is unique, we have noticed that there are common legal questions about the establishment of the StartUp corporate entity, such as:

• Which is the most appropriate type of forming a corporate entity for a “StartUp” company?

The most popular corporate entity of a “StartUp” type is the Limited Liability Company (LTD). This is because the company is a separate legal entity and the responsibility of the owners and shareholders is limited to their share of the investment capital, without any extension to their personal assets, unless of course the case is of a criminal nature.

• Where will the headquarters of the new entity’s StartUp be?

Because of the European Union as well as globalization, a “StartUp” company can choose its headquarters among multiple jurisdictions. Cyprus is one of the most popular jurisdictions for the incorporation of a company since it has a straightforward taxation system and a 12.5% corporate tax, one of the lowest in Europe. In addition, among others reasons, Cyprus has more than 60 double taxation treaties established with other countries, is a Member State of the European Union, operates in a favorable tax regime, has a low to zero retention of dividend taxes, any financial losses of a company may be transferred against future profits for an indefinite period, while the company registration is quick and immediate.
Additionally, Cyprus’s investment strategy is strongly supported by the government and is constantly creating new business opportunities.

• How long does it take to establish a new legal entity in Cyprus?

7 – 9 days

• What is the appropriate structure / organization chart of the new legal entity “StartUp”?

The appropriate structure / organization chart of the new legal entity depends on a case-by-case basis; however, it is explained in a descriptive way in the Memorandum and Article of Association, defining the relations of the contracting parties.

• What should be mentioned in the Memorandum and Article of Association of the new legal entity?

The Memorandum and Article of Association mentions, all general terms as well as specific, all the conditions that ensure and regulate the relations of all the Contracting Parties involved, as they result from the legislative framework of the jurisdiction in which the new legal entity will operate.

• How will the ownership of partners and / or shareholders and employees be divided in the new legal entity?

The drafting of a shareholders’ agreement defines, inter alia, their obligations and rights, their meetings, the decision-making process to be followed, the terms and conditions of a voluntary resolution and the provision of the necessary mechanisms for the immediate settlement of disputes between the parties.

• What contracts are needed to ensure the stable and continuous development of the new legal entity?

It is wise to have shareholders and employee contracts that will define and clarify the relationship of all the parties involved.

• Is the drafting of a Privacy and Confidentiality Agreement needed?

Because of the innovative nature of “StartUps”, it is advised to draft a Privacy and Confidentiality Agreement when two or more members exist, to preserve the idea until the new entity has its proprietary intellectual property in its possession.

• Do the “StartUps” need to register their intellectual property?

The main competitive advantage and the most important predictor of StartUps’ success is innovation. Therefore, safeguarding and protecting intellectual property is of major economic importance for the enterprises of this type.

My legal and business advice for StartUps, is to work with a law firm specialized in corporate, commercial and employment law, prior to the start of the company, which will also have the necessary knowledge and connections at an international level. This cooperation will ensure the protection of the new corporate entity while the company is in line with all procedures resulting from the legislative framework.

In addition, such cooperation is a necessary pillar for setting the right foundations of the enterprise, which can later evolve into an international “StartUp”. Unfortunately, we have repeatedly observed that the founders of companies turn to legal advisors at a later stage and they are called upon to solve various problems that could be avoided with the proper cooperation of reliable lawyers who are familiar with this company model.

The post StartUps – Frequently Asked Questions appeared first on Chambersfield Economides Kranos.

There are many cases where investors, real estate agents and construction companies have questioned whether a real estate agreement requires the appointment and supervision of a professional lawyer.

Even more times we heard that the contract is only typical and meets the basic requirements of the law or that the contract is standard, follows a specific pattern and does not require any change.

A contract, even when the transaction appears simple and straightforward, does not cease to be the most important document of the transaction, as it defines the rights of the parties involved and the appropriate actions on how to resolve various disputes that may arise. Additionally, a proper and careful contract limits all possible risks and prevents uncertainties, which could lead to disagreements.

As an international law firm that frequently deals with multiple and complex real estate transactions, we have unfortunately encountered many cases in which investors and service companies did not pay the necessary attention to the sales contract to cover all the chances of any dispute before, during and after the transfer of the real estate property, resulting in unpleasant and serious consequences that could only be solved through court actions.

Owning a property is a long-term and significant investment because of the large amounts involved. Therefore, investors, sellers and buyers, have to follow the appropriate procedures as defined by the legislative framework, during the closure of an agreement, in order to safeguard their interests.

On the other hand, real estate agents, construction companies, as well as land development companies, should safeguard their rights in order to avoid adverse consequences that may arise during the closure of the agreement, i.e. cancellations, financial problems etc.

Therefore, appointing an experienced law firm is absolutely necessary because, as legal advisors and knowledgeable legal practitioners, they can secure the benefits of the involved parties and propose the insertion, deletion or modification of terms that, in case of a disagreement, will determine what has been agreed. Additionally, the law firm will ensure that the contract is fully compliant with the provisions of the law governing the terms and conditions of the transaction in question.

Additionally, law firms often act and provide escrow services for the implementation of real estate contracts. In these cases, the law firm provides the “escrow service” as a third party. This service works in between the transaction and the law firm oversees its smooth flow. Typically, this service is offered in cases where investors come from a different country than the provider. However, this service is also used in cases where all the parties involved are from the same country.

Moreover, legal advisors are able to advise the investors, sellers or buyers on the strategy needed to be followed in their dealings with real estate transactions and purchases. The real estate market, which will be incorporated into the investors’ portfolio of real estate, is very important and influenced by various factors that determine its future value. Let’s not forget that every investor wants to increase its income flow. The main factors to be considered for each investment transaction of this type are the location, future use, tax system, the reliability of the real estate provider and the resale strategy for the property.

Taking everything into consideration, I would like to highlight that, by appointing an experienced law firm, investors, buyers, sellers and involved providers, secure their rights when signing the contract and are fully informed about the legislative framework and the practical part governs the purchase and sale of real estate.

The post Real Estate Contracts & Their Commitments appeared first on Chambersfield Economides Kranos.