 In this video, we'll look at what HR issues you should be aware of when converting an existing trading business into a cooperative. If you are setting up a new cooperative, take a look at our video on HR basics. The legal implications of buying, transferring or acquiring any business can vary depending on the facts. We'll be looking at some general principles, but you must take advice from an expert. This video will help you ask the right questions and get the advice you need. You can find out how to get that specialist help on the Hive website. If you're not quite sure if you want to become a cooperative, there's plenty of good guidance available on the type of cooperatives you can form and which might work best for you on the Hive website. So, you've made your decision that you want to convert to a co-op. A good starting point is to understand what you are taking on. If you are purchasing a going concern, the agent or seller might have given you more information already. Businesses and buying options come in a range of formats. Let's take a look at some. A sole trader's business. A partnership. A company. A cooperative. Part of a local authority. Premises owned outright or leased from the landlord. Assets only. Sometimes when you buy a business, the obligations of the previous employer become those of the new employer. That can include those rights and liabilities relating to employees. It's important to take advice to know if this applies to your business. In some cases, business transfers are covered by the transfer of undertaking, protection of employment regulations. You may have heard of people referring to Tupi, which is the abbreviation. Tupi deals with the rights of employees and the obligations of the new and previous employer upon any transfer. In some cases, where an organisation is taken on from a local authority or the public sector, similar regulations might govern employees, such as the Cabinet Office's Statements of Practice. In other cases, Tupi might not apply. But there are other laws that mean that the rights and obligations of existing employees owed by the previous business continue into your new co-op. Sometimes the things that you're acquiring are just some of the components of a business, such as stock or machinery, and Tupi doesn't apply. As a starting point, it's best to know as much as you can about exactly what you are buying and want to convert to a co-op, because this will help you to take further advice. If you can't set the whole picture, the advice is likely to be to get some more information. Tupi can be complicated and is specific to the circumstances of your particular conversion. When a business or service provider converts into a co-op under Tupi, the Tupi regulations mean that usually that the new co-op automatically becomes the employer of the existing business's employees. The terms and conditions of the transferred employees are protected and their previous years of employment count as continuous service with the new co-op. Also, depending on the size of the business, you might need to give specific information to trade unions or to elected employee representatives. If the old business has less than 10 employees, you can deal directly with them. But if there are 10 or more employees, you will probably need to elect representatives to inform and, in some cases, consult over the transfer. Tupi will restrict your ability to dismiss employees or change their terms and conditions of employment and specific advice will need to be taken if any employees will leave as a result of the transfer. Or, if for similar reasons, any changes to their employment contracts will be needed. The Tupi regulations are not unique to converting to a co-op and general advice can be found on the government's website at www.gov.uk. ACAS also produces a guide to handling Tupi transfers. OK, so what if Tupi doesn't apply? In most cases, this means that you can ignore the Tupi regulations and they will not have an impact on your co-op conversion. That's not the end of the story for a business conversion, whether it's to a co-op or any other type of business. You might face other issues which govern the rights of employees and the obligations of the employer. These include if you are a local authorities and in the public sector where the cabinet offers statements of practice applies, buying a limited company where the business continues under new ownership but all existing rights and liabilities are unaffected. Whether or not your circumstances are covered by Tupi, it is good practice to get employee liability information and consult with employees over changes which are happening to their place of work and employment. This is because getting good relevant information about what your new co-op is taking on will help you to navigate through the process of taking advice and entering into any legal agreements that might be required and it's always good to communicate and inform affected employees. How do I know whether or not Tupi applies? You need to take advice from an expert in this area. It can be very risky to go it alone and press on with your conversion without having the benefit of legal advice tailored to your particular circumstances. Don't forget the Hive can help you get advice. Here are some pointers on what your advisor may ask. What are you hoping to take on from the old business or service provider? Think about employees, contracts, premises, machinery, stock, goodwill. Has the business or service been trading as a going concern and will there be any interruption in the business as a result of the conversion? If so, for how long? How similar will the old business be to the new one? Under a Tupi, the seller or outgoing service provider has to provide you with the following information which is called employee liability information. They must provide this 28 days before any plan transfer. Other important things to be gaining details about include So, when talking through your conversion with the people that run the business at present don't forget to ask them some basic information about the employees. Aside of the legal framework governing business transfers a great deal of employee related issues can be agreed as part of the purchase agreement. A good expert such as a lawyer will help you through that process. It helps for example if the legal firm dealing with property and premises related issues also factors into the agreement to purchase matters covering employment liabilities. A good lawyer will be able to give you advice on protecting your new co-op. How to protect yourself if some or all employees will not transfer to the new co-op? Your freedom to do things differently after conversion. What rights and liabilities should be paid for by the seller on conversion? Adjusting the price to reflect new things you learn as more information becomes available? What warranties and indemnities you might give and or receive? These issues can be complicated, much like when buying or selling a house. So good information must always be supplemented by good advice. See the hive for more information on where to get further help. In summary, get good support to help you through the HR issues in a conversion. Know what you are converting and know what employees you may be taking on and what liabilities you might therefore pick up. Understand that these issues arise in any business conversion and are not unique to converting to a co-op.