When you invest in a company on Crowdcube, your shares in that company will usually be held by a nominee.
In short, this means that we hold and manage your shareholding, but you still get all the benefits of being a shareholder:
- Stay in control with votes on key decisions.
- Access pre-emption and follow-on rounds.
- Keep updated on key developments.
- Fully managed service when your shares are acquired or pay a dividend.
How does the nominee structure work?
Rather than issuing the shares to you directly, the shares are instead issued to a nominee company: Crowdcube Nominees Limited. The nominee is named in the company’s register of investors and will be the legal holder of the shares. The company will communicate directly with the nominee, but may also send you updates directly.
The nominee will hold the shares on trust for you – the beneficial owner – and Crowdcube will administer the holding by the terms set out in the Investor Terms to safeguard your rights and entitlements.
You should read the legal review which will be attached to the email you are sent after the pitch closes to investment and the Investor Terms, which apply to every investment.
How does voting work?
If we need to get your vote on a matter, we’ll poll all Crowdcube investors in that company electronically, and instruct the nominee to vote in accordance with the wishes of the majority of investors who respond. We work out the majority according to how many shares the responding investors hold. For example, if:
- the nominee holds 100,000 shares on behalf of Crowdcube investors;
- the beneficial holders of 60,000 shares respond; and
- of these, the holders of 54,000 shares (94% of the shares held by the respondents) indicate that they want to vote for the resolution,
then the nominee would vote in favour of the resolution with all 100,000 of its shares (including those held on behalf of investors who did not vote or who voted against).
Will I get pre-emption rights?
Where the company offers its investors the opportunity to exercise pre-emption rights – ie investors are given the opportunity to buy additional shares before the shares are made available to other investors – Crowdcube will make the nominee’s allocation of shares available to you and the other investors via a private pitch on Crowdcube.
What happens if the company is sold or pays a dividend?
Returns on your shares (for example, dividends or the proceeds of any sale) are transferred to you by the nominee. If this happens, you will be asked to confirm your bank details so we can issue any return to you.
Will my investment still be eligible for EIS/SEIS?
Provided the company, the shares being offered and you meet all of the requirements to qualify for EIS, your investment will still be eligible for EIS and the tax relief the schemes offer.
How do I know if my shares will be held by a nominee?
If the shares are being offered via a nominee, this will be noted in the “Share Types” section of the pitch page and the legal review/explanatory note attached to the pitch. Once share certificates are issued to your portfolio, when viewed you will see 'Beneficial Ownership' meaning the shares are held under nominee.
Can I transfer my shares?
In most cases, you can transfer the beneficial title to your shares to another Crowdcube member without any restriction. You just need to get in touch with the support team and they will assist you with transferring the shares into the name of the buyer. However, we currently can’t help you find a buyer – you need to find them yourself. We also do not get involved in the transfer of funds, but we can recommend a secure transfer payment agent if you would prefer that security.
We typically find that the most common transfers are to family and friends. We can usually arrange this pretty quickly and at minimal cost.
There are some exceptions to the above. If you hold shares in Monzo, for example, you should refer to the Monzo Community Forum, which gives details about transfers of shares in Monzo.