Different considerations may apply from accounting and tax perspectives, and those aspects should be taken into account too. This would be fraud, and would be likely to expose those involved to a number of different criminal offences. Documenting what happened in the past What you can do is document a transaction which has actually happened in the past which had not been formalised. For example, one group company may have lent money to another group company without documenting the arrangements in a written loan agreement.
In this case the Backdating contracts german law firm that the transaction did happen is a matter of record, and the relevant records may include accounting entries as well as entries on bank statements. Similar situations may arise in relation to intra-group supplies of goods of services, or transfers of a business where the associated transfer of employees may also be a matter of record.
In this kind of situation, the following general approach should be considered:. Ratification — it may be that the transaction can be ratified after the event by the relevant decision-making bodies e.
Documentation — the relevant arrangements can be documented in the appropriate form, such as a loan agreement or business transfer agreement. It is helpful if the recitals to the agreements describe the history of what actually happened, when it happened and what evidence of this exists.
The documents should be dated now i.
Formalities — in some cases specific legal formalities may need to be complied with in order to perfect the transaction. For example, a transfer of land may need to be documented in writing and registered in order to be effective. You will need to analyse the different elements of the transaction and consider whether as a matter of substance it is fair to say that the transaction did actually happen on the historic date. In the case of a transfer of assets, you may need legal advice as to Backdating contracts german law firm the beneficial interest in those assets has already passed, even though some formalities still need to be completed.
In other cases it may be clear that the transaction has not happened yet. But there may still be a desire to backdate the economic effect.
For example, an intra group transfer of business and assets may have been intended to take place on 31 March but could not take place then because regulatory approvals were not yet in place. Those approvals may be obtained in May, and the group may still want to be able to account for the transaction as if it happened as at 31 March.
From a legal perspective, the business sale agreement could potentially be signed in June, and the agreement may specify an immediate completion date i. This would involve, amongst other things, apportioning costs and revenue by to the effective date. From a corporate governance perspective, the transaction would be approved in the normal way, e. As mentioned above, it is a matter of accounting practice as to whether the transaction can properly be accounted for as taking place on 31 March.
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Backdating group reorganisations This guide was last updated in August In this kind of situation, the following general approach should be considered: Reorganisations Guides How to carry out due diligence in corporate simplification Backdating contracts german law firm Reorganising foreign companies in China Why carry out legal due diligence for intra-group business transfers?
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However, including a counterparts clause is Backdating contracts german law firm practice and reduces the risk of a party If a contract is backdated, this may create a false impression as to when the contract If the contract is required by law to be in writing then it can only be varied in writing.
Business Owners often ask whether a contract that their company is UK Corporate/Commercial Law Rawlison Butler LLP 2 Apr to the fact that parties signing a contract cannot backdate the date of signature. Canada, China, Cyprus, France, Germany, Italy, UK, United States, Jersey, Guernsey.