News & Insights

Will a Merger Impact my Sponsor Licence?

If your business is headed for a merger or acquisition, then you may need to update or even replace your sponsor licence.

Businesses that want to hire migrant workers on work visas, such as Skilled Worker or Global Business Mobility visas, need to apply for a sponsor licence – this licence allows the business to “sponsor” these migrant workers, enabling them to obtain their visas and work for the business in the UK.

Businesses which hold sponsor licences, referred to as “sponsors”, are obliged to keep the Home Office updated on any changes to the business or its sponsored workers, via an online portal called the Sponsorship Management System (SMS). Sponsors must use the SMS to report various significant changes affecting the business within 20 working days of the change, including where the business is involved in a merger, de-merger, or acquisition, or if there is a change in ownership.

Sponsor licences cannot be transferred from one organisation to another. Therefore, if sponsored employees are going to transfer from one employer to another as part of a business acquisition, the new employer must apply for a new sponsor licence, assuming they do not already have one, within 20 working days of the move taking place. The new employer will not have to assign new certificates of sponsorship, nor will the transferring employees have to apply for new visas, provided that the new employer has a sponsor licence and accepts responsibility for the transferring employees, and the duties of the sponsored employees do not change.

The organisation that is being acquired and losing employees will need to report the change on SMS within 20 working days. If they will no longer need a sponsor licence following the acquisition (because they no longer have any employees) they may even need to surrender their sponsor licence – this can also be done via SMS.

If you need advice on your sponsorship obligations in relation to a merger or acquisition, please get in touch at [email protected]. If you would like legal advice on your acquisition or merger more generally, then our experienced corporate team would be well-placed to assist – you can contact them here.