Two-minute masterclass: National Security and Investment Act (NSI)
Need to know: The government must now be notified in advance of acquisitions or investments in companies that may pose a risk to national security. The eligibility criteria for notification is broad and covers many of the sectors UK start-ups commonly operate in. Qualifying acquisitions could be blocked if deemed a risk and there are severe penalties for non-compliance.
What you need to do:
- Check if the NSI Act rules apply to your transaction.
- Check if your transaction meets the criteria for a voluntary or mandatory notification.
- If notification is required, submit a notification using the National Security and Investment service.
- After notification, the government will review your transaction and either clear it, impose certain conditions, or block or unwind it.
Penalties for non compliance
Penalties for not complying are significant and can include severe financial penalties (the greater of 5% of global turnover or £10 million), and imprisonment. It’s therefore critical that the NSI Act is considered during every transaction.
What founders and start-ups need to consider
Founders and start-ups will need to factor in time for NSI Act processes for qualifying transactions. In the event of a full national security assessment being required and this going in to an extended assessment period, there could be lengthy delays to transactions.
Founders will have to consider how to communicate and mitigate these risks during any transaction processes, bearing in mind this could take in excess of 2 months.
Get the full details on the NSI Act
You’ll find even more detail on this topic in our blog post: National Security and Investment Act (NSI): What founders and start-ups need to know.
Need some help? Contact us to speak to our NSI Act expert Bill.
Next time...
Next time in two-minute masterclass: Exit strategies for founders and start-ups
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Great news from Seven Legal & our clients
Seven Legal’s sustainability work with Ecologi continues and we are really proud of our latest environmental milestones. With Ecologi’s help, we have planted over 3,300 trees in the UK and abroad and offset over 240 tonnes of carbon dioxide. That’s the equivalent to the carbon dioxide generated by 186 long haul flights or 601,221 miles driven in a car. Read more about our commitment to sustainability.
It’s been a stellar month for our client xigxag, they have…
- Been awarded New Business of the Year at the Cornwall Business Awards,
- Been awarded Mobile and Emerging Technologies Startup of the Year for the StartUp Awards National Series; and
- Been shortlisted for Disruptor of the Year by the Great British Entrepreneur Awards & Community.
Congratulations to all at xigxag, we hope you’ve plenty of room to display all these awards!
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