Immigration considerations on incorporation or merger

Are you thinking of making structural changes to your organisation? Are you a sponsor and hold a sponsorship licence? Your organisation may currently be an unincorporated association or trust and wish to become a charitable company or CIO or you may be considering a merger. If so, it is important to consider if there are any consequences on your sponsorship licence which may result in compliance issues.

Impact on sponsorship licence

When there is a change in ownership of an organisation, a sponsorship licence may not transfer. Failure to consider the impact of structural changes on your licence, and thereafter take the appropriate action, can lead to punitive action being taken by the Home Office.

The guidance states that where there is an alteration to an organisation’s structure, consideration should be given if:

• there is a change in direct ownership of the organisation;
• part or all of the organisation is being sold;
• the organisation is being partly or wholly taken over; or
• the organisation is splitting into new organisations .

Depending on the nature of the change, this may need to be reported by the Level 1 User via the Sponsor Management System (SMS).

If the legal status of your organisation changes, a new licence may be needed. If your charitable trust is planning to convert into a charitable company or CIO (Charitable Incorporated Organisation), you must apply for a new licence within 20 working days of the transfer taking place. All current sponsored workers must thereafter be transferred from the old licence onto the new licence. Your old licence may then need to be surrendered or made dormant.

Where a new licence is not needed, changes must be reported in the given timeframe otherwise you risk penalties.

Penalties for failure to report changes

The Home Office take compliance breaches extremely seriously. If your organisation is a sponsor and is contemplating a structural change, it is essential to consider the impact on your licence in order to protect your sponsored workers and licence. Regard should be given to the type of change planned as this will influence the actions you are required to take. In order to report any changes, you should also ensure your Level 1 User is able to access the SMS in advance of changes taking place.

Penalties for failure to report changes can include downgrading the licence or even revocation. The consequences of which not only affect the organisation but also the sponsored employees, as they could be unlawfully working for the organisation. Sponsored workers and their families might also have their leave curtailed.

Acquiring a new site

Where your organisation is gaining a new site, there are again different requirements. The new site must be added onto your current licence as an additional site via the Sponsor Management System (SMS).

Further advice

If you are unsure about the impact of structural changes on your sponsorship licence, we strongly advise obtaining legal advice well in advance of the proposed changes being made or implemented.