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JGM
JGM, Solicitor
Category: Property Law
Satisfied Customers: 10910
Experience:  30 years experience in property law.
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Dear Solicitor, I have negotiated a 50,000 pound equity

Resolved Question:

Dear Solicitor, I have negotiated a 50,000 pound equity stake in a small company in England, which comes to a 6% equity holding. How do I secure my stake legally? For example is it advisable to go through a notary public? Or is filing the shares issued to me at Companies House.gov.uk sufficient? Any other steps I should be taking? Thank you for your consideration
Submitted: 9 months ago.
Category: Property Law
Expert:  Ash replied 9 months ago.

Hello my name is ***** ***** I will help you.

Have you had a contract drawn up by lawyers at all please?

Customer: replied 9 months ago.
Hi Ash, No, no contract. There is only a board meeting (with minutes) accepting my investment and the number of shares I get. I assume we'll submit the board meeting minutes to companies house as well.
Expert:  Ash replied 9 months ago.

You should get a formal contract prepared. That way each party knows their rights, responsibilities, what happens if things go wrong and what happens if one party wants to terminate.

As such you should get a formal contract prepared by a Solicitor. In any event any share issue should be registered at Companies House.

But get a contract prepared to protect yourself.

Can I clarify anything for you about this today please?

Customer: replied 9 months ago.
Both parties would like to avoid writing up a contract. The focus is on getting the right documentation in terms of board / shareholder resolutions and forms submitted to Companies House. Can you pls list what resolutions and forms need to be prepared?
1. For example I already have the board resolution which outlines how many shares I will be allotted and also the total number allotted (issued);
2. SH01 form to be submitted;
3. register of members at Companies House;
4. Shareholders' resolution to waive pre-emption rights (by whom should that be signed specifically under normal circumstances);
5. Physical share certificate.
Thank you for your input.
Florian
Expert:  JGM replied 9 months ago.

You should get a physical share certificate and ensure SH01 form is submitted to Companies House. The next Annual Return should reflect your membership of the company. Those are the things to be done if the parties are averse to a shareholders' agreement. A resolution to waive pre-emption rights would be a resolution to change the Articles of Association and would have to be agreed by the company in general meeting. It would be unusual for a small private company to do that, however. I hope that helps. Please leave a positive response so that I am credited for my time.

JGM, Solicitor
Category: Property Law
Satisfied Customers: 10910
Experience: 30 years experience in property law.
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