Once your campaign reaches 75% of its funding target, we will begin our legal review to ensure your company is ready to receive crowd investment. Following completion of a questionnaire and fact find, a member of the Crowdcube legal team will work with you to complete our legal review so that we can close the round. As part of our review we will ensure:
- The Crowd’s investment is being made into a sole company or the top company in a group
- None of the shareholders in the company have any preferential economic rights, save for a limited right to get back their original investment on a liquidation
- All key intellectual property is owned by the company, not a founder or other individual.
- All convertible loans and loans of a significant amount are documented
- The company is not involved in any significant dispute/litigation
- All investors reflected on the pitch progress bar are paying the same price per share and have the opportunity to receive the same class of shares (depending on amount invested)
- Shares are being offered on a fully-diluted basis
- The share classes offered on the pitch are reflected in the company’s articles of association
- The terms that apply to Crowd investors are set out in the articles of association and no Crowd investor is required to sign up to a separate shareholders’/investment agreement
- The articles of association will need to take precedence over any shareholders’/investment agreement
- The company is able to issue share certificates and notices electronically
There is no need to make changes to your articles of association or any shareholders agreement prior to our legal review. Please do not circulate or sign any written resolutions or similar prior to our legal review. You will be asked to make certain warranties as part of our review.
Once our legal review is complete we will take the following steps:
- Cooling-off email: Once you have satisfied any completion conditions, we will email all of your Crowd investors. The investors will be given a chance to review the company’s articles of association and to consider the warranties and disclosures you have made. They will then have 7 working days to decide if they are still happy to proceed with their investments
- Resolutions: Your existing shareholders and directors will need to sign resolutions approving the issue of shares to Crowdcube investors. They may also need to agree on changes to your existing articles of association and other documents
- Payment capture: When we are satisfied that any necessary documents have been signed, we can capture payments from Crowdcube investors
- Share issue: After payments have been captured, we will issue electronic share certificates to Crowdcube investors
- Filing: You will need to file certain forms with Companies House. We can give you some general guidance, but we cannot fill in the forms for you
- EIS/SEIS: If your pitch offered tax relief, at this stage we will introduce you to our in-house EIS/SEIS team or an external EIS/SEIS specialist, who will assist you in making the necessary filings with HMRC and completing forms for investors
We can guide you and your solicitors on our process and provide template documents that may help in some cases, but we cannot amend your documents or give legal advice to your company, its directors, or shareholders. You may therefore need to appoint and pay for your own solicitors as part of the completion process.