Susan Perry Senior Associate Druces LLP

Starting Out Having good people around you Finance Employment Tax

Structures Sole Trader Partnership LLP Private Company

External Investment Cash – loan / shares Expertise and contacts How much are you prepared to give away?

Percentages 95% / 90% meetings at short notice 75% special resolutions eg change constitution / authorise allotment of shares 50%+ remove directors 25%+ block special resolutions 5%+ / 10%+ prevent short notice meetings

Reconnaisance What is their background? How much are they proposing to invest? Check out their LinkedIn profile and see who their connections are. Do you know any of the same people? Could you ask them what they are like to work with? Do they really have the great contacts they say they do? What can they really bring to your business and how much is that worth to you? Beware those offering services in return for a stake in your business.

Shareholders Agreements The Directors have authority to deal with day-to-day management Subject to a list of ‘reserved matters’ which are subject to shareholder approval Can be set at different levels

Reserved Matters Examples of matters requiring shareholder approval: –The issue or transfer of any shares or the grant of any option in respect of the same –The issue of securities or loan capital convertible into shares or debentures –Borrowing or raising funds other than normal trade credit –Granting any charge or giving any security in respect of all or any part of the company’s business, assets or shares –Changing the company’s Articles of Association –Adopting or amending the Business Plan –Changing the nature of the business conducted by the company –Incurring capital expenditure over £[] –Engaging employees or contractors with remuneration packages worth in excess of £[] per annum –Acquiring or disposing of a material asset of the business

Terms of Business Protect the business, limit liability, provide for payment Forming the contract – incorporating your terms Payment Terms Electronic invoicing and payment Credit monitoring

Susan Perry Corporate Senior Associate