Article 50 has now been triggered and the United Kingdom (UK) is beginning the process of negotiating its exit from the European Union (EU).

However, are we any clearer as to what this will actually mean for the business community, and in particular for entrepreneurs? The short answer is no, but here are a few areas which will be of importance in the next two years:

EU Law

Although we cannot be sure what Brexit actually means (other than the exit of the United Kingdom from the EU), it is very unlikely that there will be much change in the next two years while negotiations take place. EU law will remain in force in the UK until the time that the UK actually leaves; even after that it is not likely that the Companies Act 2006 will be widely reviewed or amended.

Currency

In the meantime, currency fluctuations and the uncertainty surrounding the free movement of workers (both the status of existing employees and the availability of new recruits from outside the UK), as well as access to European funding, would appear to be the most likely areas of potential concern for entrepreneurs.

Contracts

As negotiations proceed, we expect to see specific “Brexit clause” drafting in contracts to provide for situations in which the outcome, or the ability of parties to perform under the contract, is or may be uncertain. There is also likely to be an increase in the use of deferred and contingent payment structures (such as earn-outs) and other measures designed to attempt to manage the uncertainty factor, in particular in the sale of companies whose future performance could be adversely affected by Brexit.

Businesses with any UK presence should consider how key contracts will be affected and plan for potential disruption.

Please contact the Business Law Team if you would like advice or assistance with planning for Brexit.