How long does a sponsor licence last for?

A sponsor licence is granted for a period of four years,after which it will expire unless the sponsor takes steps to renew it before the expiry date. An application to renew a sponsor licence should be made in good time as UKVI will not be able to stop the licence from expiring should any unforeseen complications arise.

What are the main requirements for a sponsor licence renewal?

If a sponsor currently employs migrant workers and wants to continue the employment or wishes to employ migrant workers in the future,then an application to renew the sponsor licence must be made.

What is the sponsor licence renewal fee?

A fee is payable when renewing a sponsor licence,however the amount payable will vary depending on the size of the company.

How do l renew my sponsor licence?

An application to renew a sponsor licence should be made online using the Sponsor Management System (‘SMS’) and can be made up to 90 days before the expiry date of the sponsor licence.

What happens if l fail to renew my sponsor licence?

If a sponsor fails to renew its sponsor licence and it expires this will have a number of consequences for both the company and the sponsored workers

Sponsor Licence Restructures and Changes in Ownership

Organisational restructures and sponsor licences

Organisational restructures in the form of sales, mergers, and acquisitions are often complex transactions and can have an impact on an organisation’s sponsor licence. Immigration compliance must therefore be considered carefully when a sale or acquisition takes place, and a related company holds a sponsor licence.

How can a corporate restructure affect a sponsor licence?

A sponsor licence is not transferable, therefore any of the following organisational changes can impact a sponsor licence:

A change of direct ownership of the organisation.
A change of ownership of a parent company.
If a sale results in the transfer of a controlling number of shares.
The organisation is being taken over completely or in part by another organisation.
The business is being split to form new organisations.

The necessary action to be taken depends on the type of organisational change. For example, a change of direct ownership would require a new application for a sponsor licence, whereas a change of ownership of a parent company does not require a new sponsor licence.

Duty to report changes to an organisation

It is important that sponsors are aware that they must inform the Home Office of any changes to their circumstances. Sponsors are required to report a merger, takeover, or a change of ownership via the Sponsorship Management System (SMS) within 20 working days.

Is a sponsor licence transferrable?

The Home Office will only grant a sponsor licence to a business if it is satisfied, having conducted extensive checks, that it is suitable to hold a sponsor licence.

Where there is a change to the direct ownership of the organisation, such as where the organisation is being taken over or merged into another organisation, the sponsor licence is not transferrable. However, if a sponsor organisation is being merged or taken over by another organisation that holds a sponsor licence, the organisation that is taking over may apply to increase their Certificate of Sponsorship (CoS) allocation, and transfer existing sponsored migrants.

What happens if the whole sponsor licence holding business is sold?

Where a sale results in the transfer of the controlling interest (i.e. 51% or more of the shareholding), this will always trigger the requirement for a new licence if there are sponsored workers. This is regardless of whether or not there are any changes to the day-to-day management of the business.

Within 20 working days of the sale, two events must happen. The Home Office must be notified of the sale of the shares via the SMS. A new licence must then be obtained, unless the buyer already has a sponsor licence and wants to transfer the organisation it is acquiring onto that licence.

EXAMPLES

X Ltd has held a sponsor licence for four years and has five sponsored workers. The controlling shares in the business are being sold to a private individual who will have nothing to do with the running of the business. Within 20 working days, X Ltd will need to apply to UKVI via the SMS to make its current licence dormant and apply for a new licence. This is the case despite there being no other changes to the business.
X Ltd is sold to a company, Y Ltd, rather than a private individual. Y Ltd does not have a sponsor licence. X Ltd must notify the Home Office via the SMS of the sale to Y Ltd within 20 working days of the transaction. There are then two possibilities. A new licence could be applied for by X Ltd or Y Ltd could apply for a new licence to cover itself and X Ltd as a branch.
In the above scenario, Y Ltd will just buy the assets of X Ltd; this is known as an ‘asset sale’, and X Ltd will cease to trade. The employees of X Ltd, including the five sponsored workers, will transfer to X Ltd. In this case, within 20 working days, X Limited must notify UKVI of the change. Its licence will then be made dormant. If Y Ltd has a sponsor licence, it will make a request via the SMS for the sponsored workers, who will be transferring under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (‘TUPE’), to transfer to that licence. If it does not already have a licence, it will need to make a new licence application in order for this to happen.

These are just a few examples of sponsor licence restructures that our team work on.

If there is a corporate structure in place, what happens if the ultimate owner changes but there are no changes to the sponsor licence holding entity?

If there is a change higher up the corporate chain, but no changes to the sponsor licence holding entity, the only action that is needed is to notify the Home Office of the change higher up the chain via the SMS. There is no requirement for a new sponsor licence.

Do the same rules apply for education providers that sponsor international students?

A slightly different set of requirements are in place for sponsors of international students that are involved in a corporate transaction. Please contact us should you need advice on such a change.

What happens if an organisation fails to consider immigration compliance?

We have been involved in numerous cases where a relevant corporate transaction had occurred some time previously and the organisation has not realised that action needed to be taken, either in the form or a report to the Home Office, or by way of a new licence application.

The Home Office can make checks to establish whether an organisation is complying with its duties as a licenced sponsor at any time. If the Home Office believe that a sponsor has not complied with its duties, for example, by failing to report changes to an organisation, or failing to apply for a new sponsor licence when required, they may take action to suspend or revoke the sponsor licence.

Home Office compliance action can have detrimental consequences for organisations and their sponsored workers.

How our Immigration Solicitors can help

Corporate transactions can cover many different scenarios and we often deal with extremely complex cases involving mergers, de-mergers, asset transfers, and complex sponsor licence restructures.

If you require legal assistance or would just like to discuss your matter with one of our experts please contact us or complete our enquiry form below.

More Sponsor Licence Restructures FAQs

Will corporate lawyers check if action on a licence is needed during a sale process?

In our experience, there are many corporate lawyers that will pick up on this. However, we have dealt with numerous situations where the corporate transaction has been finalised, and an existing sponsor licence has not been addressed.

We have dealt with situations where we have identified that a change of ownership occurred several years ago and have taken the appropriate steps to notify UKVI and remedy the situation.

Will UKVI revoke our sponsor licence if we do not report a change of ownership in time?

In our experience, UKVI does not generally revoke a sponsor licence if the only issue is that a sponsor failed to report a change of ownership within the required time frame. If you are uncertain if your organisation is meeting its duties as a licenced sponsor, we recommend seeking professional legal advice. We offer remote and on-site compliance reviews to assist sponsors with the maintenance of their licence.

Does UKVI review Companies House records to check if there has been a change of owner?

Yes, we have dealt with numerous situations where the change of owner was identified by UKVI and the need to take action on the sponsor licence was brought to the attention of the sponsor.

Does a merger trigger any sponsor licence action?

It may do so and will depend on the details of the merger.

If a family member transfers their controlling interest to another family member, would the requirement to take action still stand?

Yes, the requirement to take action remains even if the transfer is to a family member.

Do migrants who are being transferred to a new sponsor licence following an acquisition need to apply for new visas?

No – as long as the buyer and seller of the business both follow the requirements, responsibility for the sponsorship of the workers will transfer to the new owner via their licence. The new owner will need to make reports regarding the sponsored workers against the licence on which they were originally sponsored.