Minutes for the buyer of shares with exchange of signed agreements, and completion of the transaction taking place at the same time.
Company Name: [Insert full name of Company]
- 2.1 These are the minutes of a meeting of the board of directors of [Insert name of Company] ("Company") held at [Insert address of meeting] on [Insert date of meeting] at [Insert time of meeting].
Summary of the people at the meeting
- 3.1 A list of the people attending this meeting, along with any apologies for absence, is included in Section 1 of the Schedule.
Also included in this document:
4. Necessary Declarations
5. Declaration of Interests
8. Concluding Remarks
Tip Sheet for Funding Agreements
When you negotiate for investment at an early stage, it is normal for a "term sheet" to be negotiated with the investors. The conditions you agree to now will influence the whole life story of the company, so it's useful to get advice at this stage covering issues like shareholder controls going forward.
Any investor or buyer will want to perform diligence before completing the transaction. This means that they will want to look at key financial records and accounts, existing contracts with customers, suppliers and employees, and corporate records. The better and more complete your documentation is, the more inclined they will be to agree with your valuation.
When you offer shares to investors or purchasers you may be making what the law calls "a financial promotion". There are complicated rules about what you can and cannot do. If you don't follow these rules you could end up with the transaction being set aside - or worse still you could face criminal penalties. This is one area where it pays to take advice.
Whenever you take in investment your control over the company will decrease. It's important to think this through at the time and look carefully at any proposed restrictions. For example do they restrict you from raising further money? Or entering into particular types of contract? Or changing the business? Are these controls customary for this kind of transaction? It's worth checking...
Share Holder Rights and Dilution
Investors will often ask for favoured or preferential treatment when it comes to looking at a sale of the company, paying dividends or liquidating the company. They may also try to make sure that their share ownership is not diluted in the event of subsequent investment. You need to carefully consider these provisions when they come up, as agreeing to them may put off other investors who come in during later rounds of investment.
Providing Accurate Warranties
You will be asked to make all sorts of promises or “warranties” in any funding document. It may be tempting to take a “seat of the pants” attitude to these promises, but you could open yourself up to criminal or civil legal action if you make statements which are misleading or not accurate. So, it’s worth making sure that anything you say in the funding agreement can be backed up with financial or documentary evidence.
This is the most important moment for any SME. You want to be able to control it – but larger investors may try to say that they have the right to force or block a planned exit. Are you happy with this? Equally you need to be able to make other minority shareholders sell if you are sure that the exit moment has arrived. These are critical provisions to address in a funding agreement.
What Happens if you Leave?
Investors may well require provisions for the management team, which mean that if they leave the Company, they have to give up all their shares or sell them at a reduced value – particularly if they leave under a cloud. So, these provisions require careful scrutiny – you don’t want the value you have worked so hard to create to be taken away from you.
LawBite Legal Advice
LawBite professional advisors can help you straightaway with all of these issues and more. Just go to the the Legal Advice section and make your enquiry. We’ll get back to you within 24hrs with a meaningful response.
Clive Rich is a highly experienced entertainment and digital media lawyer, who has also successfully run digital businesses for companies such as Sony and Bertelsmann.
A qualified barrister, he has been a lawyer for almost 30 years and has drafted and crafted contracts for a broad spectrum of multi-nationals, major organisations and brands, including Yahoo, Apple, Napster, SanDisk, Myspace and the BBC.
He has also previously run his own legal practice, Rich Futures Ltd in association with the Top 30 UK law firm, Olswang LLP, representing a variety of technology companies and SMEs.
Clive is a qualified Mediator through the Centre for Effective Dispute Resolution (CEDR) and a qualified Arbitrator through the Central Institute of Arbitration (CIArb) in London.
As a negotiator, he is the author of “The Yes Book: the Art of Better Negotiation”, published by Random House in March 2013. Clive has also designed and successfully launched a negotiation App called “Close My Deal”, enabling people to understand the basis of successful negotiation and apply the skills to everyday scenarios. He has provided negotiating coaching and deal making services to a wide range of large organisations and SMEs. He has also been a board member of a number of digital SMEs.
Clive is a devoted father and husband, but when he is not spending time with his family, he likes to unwind by playing golf or watching a variety of sports (football, rugby, cricket). He's a lifelong Milwall FC fan... but don't hold that against him!
Step By Step Guide
When To Use this document:
These are the minutes you would use for a company meeting at which you wanted to authorise the purchase of another company