Closing down a company and extracting the retained profits

Conduct of Employment Agencies and Employment businesses Regulations 2003

- a legal FAQ from Egos Ltd

New agency regulations made under the Employment Agencies Act 1973 came into force earlier this year.

The basic concepts and terminology used in the act and in the regulations which need to be grasped before one can make head and tail of them may be summarised as follows:

· 'employment' includes not only employment in its conventional sense, but also engagement under a contract FOR services

· 'hirer' means the engager - the party we generally regard as the client

· ‘Employment Agency’ means matching a work-seeker with a direct engagement – where the work-seeker will then be engaged directly by a hirer

· 'Employment Business' means hiring in and hiring on, where work-seekers are to be under the control of the hirer

· the capacity in which a facilitator acts in relation to a placement may be as an ‘Employment Agency’, or as an ‘Employment Business’, or (possibly) outside the Act and regulations, according to the nature of the placement; and therefore the overall business of one facilitator may fall into both categories - Employment Agency, and Employment Business

· 'work-seeker' includes both an individual seeking a contract, and the company through which that individual trades; the company and the individual may agree to opt out of the regulations; such agreement may be withdrawn, but not whilst the individual is in fact working

· 'client' may be used as a collective term for both work-seekers and hirers

The regulations apply in relation to the provision of ‘work-finding services’ – an broad expression, which will also cover umbrella / management companies, publications, and many online services.

The regulations are complex, and bring about significant change; anyone involved in the industry needs to have a proper understanding of their effect.

For more information:

A copy of the regulations (word format), with defined terms in bold, and footnote annotations showing (a) transitional provisions in relation to existing contracts, and (b) application to limited company workseekers, can be downloaded here.

Our own guide to the regulations (pdf) can be downloaded here. It’s no substitute for the regulations themselves, but we hope it will prove a useful quick guide to their provisions.
An article written by Egos and published on http://www.contractoruk.com in August 2004

I'd really appreciate your feedback on this FAQ - so mail me and tell me what you think of it, if it's been useful to you, or let me know of any specific problem you have where I may be able to help.

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This page was last updated on 14th October 2004

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