The BVCA would like to thank Susanna Stanfield (JAG Shaw Baker), John Heard (Abingworth), Sally Roberts (Accel), Jon Tilley (Practical Law), Andrew Wigfall and David Strong (both Marriott Harrison) for their continued support during this project. We would also like to thank the previous contributors to this project: Simon Walker (formerly Taylor Wessing), Alastair Breward (formerly Amadeus) and Steve Parkinson (formerly EY). Our aim is simple: to promote industry standard legal documentation in the UK so that investors and entrepreneurs can focus on company-specific issues. This inevitably saves time and money and follows the American precedent. We encourage all parties to adopt these documents as a starting point for their investments. Practical Law has also prepared wording notes accompanying the model articles of association and the subscription and shareholders` agreement. These are an excellent and beneficial addition to the collection of documents. We would also appreciate your feedback ahead of our next review in 2019. Many law firms, networks of entrepreneurs and other organizations offer document templates adapted to start-up investments and available on the Internet. The BVCA does not make specific recommendations as to the most suitable suite due to the wide variety and breadth of seed investment circumstances. Classification of shares: Accounting standards (including international and UK accounting standards) establish principles for the presentation of financial instruments as liabilities or equity.
Companies should review the terms and rights associated with shares (and in particular preferred shares) to determine the classification and presentation of these instruments in a corporation`s financial statements. Depending on the facts or circumstances, certain types of shares may be classified as debts according to accounting standards. Companies should consult with their auditors before finalizing the articles if they want to ensure that preferred shares are treated as equity in the company`s books. Disclaimer: Neither the BVCA nor any member of its committees or working groups assumes any responsibility for the content of the documents or the consequences of their use and that it is essential to seek legal advice before using the documents. These documents serve only as a starting point and must be adapted to your specific legal and business requirements. None of the documents should be construed as legal advice for specific facts or circumstances. The BVCA`s model documents have been designed for use in a Series A funding round. They stipulate that fund investors make a significant investment in whole or in part.
From the BVCA`s perspective, sample documents cannot be used as part of a seed funding round. These rounds are usually documented by shorter documents that are replaced or updated for a Series A round. The subscription and shareholders` agreement was drafted for signature as an ongoing contract, thus avoiding the execution formalities required for the acts. This approach is usually supported by the advice of legal counsel (available here), provided that specific legal advice is always sought for each individual situation. These documents have been prepared for use in a Series A funding round. They stipulate that fund investors make a significant investment in whole or in part. They are not suitable for seed investments and more information on how to support entrepreneurs in this area can be found in the drop-down tab on the right. However, when selecting a suite for a seed financing round, the following factors must be considered: In October 2014, the BVCA published a revised version of its model termssheet, subscription and shareholder agreement and articles of association, as well as an accounting for the treatment of preferred shares (as debt or equity in the company`s financial statements). In September 2015, the Model Statute was amended to amend the Companies Act 2006 with regard to the legal requirements applicable to companies in share buybacks. In 2017, limited amendments were made to the Articles of Association and the Subscription and Shareholder Agreement, including those that meet the requirements of the PSC`s registry and the deferred share and drag-along wording. .