TC09562 - [2025] UKFTT 00762 (TC)

Fecha: 23-May-2025

This meant that the only way that BBUK could carry on the Businesses was through CPW as its agent. In that regard, I do not doubt the fact that it is possible for a company to carry on a business thro

This meant that the only way that BBUK could carry on the Businesses was through CPW as its agent. In that regard, I do not doubt the fact that it is possible for a company to carry on a business through another company as its agent instead of through its own employees or independent contractors. As noted by the appointed person in Kurobuta at paragraph [75], a business can continue to be carried on notwithstanding a change in the assets and/or liabilities used in carrying on the business and in the way that the business is conducted. As such, once the Agreements became effective, it would have been perfectly possible for BBUK to carry on the Businesses as principal through the agency of CPW even though none of the assets of the Businesses had been transferred to BBUK, none of the liabilities of the Businesses had been assumed by BBUK and BBUK had no employees to carry on the Businesses.

118.

However, I consider that that is not what happened in this case. On the contrary, in my view, the legal rights and obligations to which the Agreements gave rise were such that, after the Agreements became effective, the Businesses continued to be carried on by CPW as principal and CPW was merely required to make payments to BBUK which were equal to a fixed percentage of the future gross revenues of the Businesses.

119.

I say that because the two fundamental features of carrying on a business as principal are:

(1)

the ability to dictate the overall strategy and direction of the relevant business, in addition to conducting the day–to–day activities of the business; and

(2)

an entitlement to the profits of the business

and, in my view, after the Agreements became effective, it was CPW which enjoyed both of those rights under the terms of the Agreements whereas BBUK did not.

The ability to dictate the overall strategy and direction of the Businesses

In short, the limitations in clauses 3.1.2 and 3.1.3 of the MSA are in no way an indication that it was BBUK and not CPW which was carrying on the Businesses after the Agreements became effective. I should add that the limitations in question made perfect sense from the commercial perspective without leading to the conclusion that it was BBUK that was carrying on the Businesses after the Agreements became effective. Under the terms of the Agreements, BBUK had an entitlement to payments that were quantified by reference to the future gross revenues of the Businesses. It is therefore unsurprising that BBUK might have wanted some assurances from CPW to the effect that CPW’s activities in carrying on the Businesses would not prejudice the amount of those future gross revenues.