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UKSolicitorJA
UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 6309
Experience:  English solicitor with over 12 years experience
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I have a startup, am in the process of raising some funds in

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Hello! I have a startup, am in the process of raising some funds in a pre-seed round and wanted to clear the cap table with my co-founder who currently holds 40% of the company.
JA: What state are you in? And have you consulted a local attorney?
Customer: I'm in the UK and have not
JA: Has anything been officially filed? If so, what?
Customer: The company was incorporated in July 2018 current shareholding is 60/40 and i want to dilute my co-founder prior to the round to 25% to reflect his actual contribution over the past 18 months.
JA: Anything else you want the Lawyer to know before I connect you?
Customer: I would like to know the options I have, including the scenario where I resign start a new company without my co-founder and raise the funds through that vehicle. We used SHA and articles of association from companies house, there was no IP assignment, no trademarks and no patents, website domain is under my personal name
Hello,

I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.

I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Nicola
Customer: replied 17 days ago.
Hi Nicola,

Please do continue, I’m keen to get at least a broad indication of what options I have.

Thanks

Stefano
Customer: replied 16 days ago.
Hello Nicola, have you found anybody that can answer this question?

Hello,

 

The best option is to discuss and agree with your co shareholder on the percentage dilution or they may agree to transfer some of their shares to you. Alternatively, you may offer your shares to them and you quit.

 

You may then form your own company.

 

If you cannot reach agreement, you would need to go to court for an appropriate order under the Companies Act 2006.

 

May I help further?

 

 

Customer: replied 16 days ago.
To what extent can i form a new competing company and transfer the IP (there was never an IP transfer right to the company itself, and the codebase has been developed by our CTO who will follow me into the new entity), I have no NDA / or contract that limits my ability to start a new competing venture, and no actual contracts have ever been signed between co-founders.

If you exit the first company as a director, you are free to enter into a competing business/company and take the IP if it was not assigned to the first company.

 

However, if you remain as a director, you would be in a conflict of interest situation in breach of your duties as a director under the Companies Act 2006.

 

Please click on 5 stars

UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 6309
Experience: English solicitor with over 12 years experience
UKSolicitorJA and 5 other Law Specialists are ready to help you
Customer: replied 16 days ago.
OK Thanks