Novabook logo

Step 2: Issue your shares

Issue new shares once you've closed your investment round

After obtaining advance assurance from HMRC, the next step is to finalise your funding round and issue shares to your investors. This step is important as it formalises the investment and ensures that you are on track to meet SEIS/EIS requirements.
Here’s a detailed, actionable guide to help you through this process:

Steps to issue your shares

Step 1: Prepare for share issuance:

• Update Your Shareholder Agreement
Ensure that your shareholder agreement reflects the new share issuance. This document should outline the rights and responsibilities of new shareholders.

• Board Approval
Obtain approval from your board of directors for the share issuance. This typically involves passing a resolution authorising the issuance of shares.

Step 2: Determine Share Details

• Valuation
Determine your company's valuation to decide the price per share. This valuation should align with the one presented in your advance assurance application.

• Number of Shares
Decide the number of shares to be issued based on the amount of investment you are raising and the share price.

Step 3: Create and Distribute Share Certificates:

• Share Certificates
Prepare share certificates for each investor. These certificates should include the investor’s name, the number of shares purchased, the share price, and the date of issuance.

• Distribution
Distribute the share certificates to your investors. Ensure that each investor receives their certificate promptly.

Step 4: Register the Shares

• Update Company Records
Update your company’s register of members (also known as the shareholder register) to include the new shareholders and their shareholdings.

• Notify Companies House
In the UK, you must file a return of allotments (Form SH01) with Companies House within one month of issuing the shares.

Step 5: Inform Your Investors

• Investment Details
Provide your investors with detailed information about their investment, including the share certificates, the updated shareholder agreement, and any relevant company information.

• Next Steps
Inform them about the timeline for submitting the SEIS2 Compliance Statement and when they can expect to receive their SEIS3 certificates.

Step 6: Use of Funds

• Allocate Funds
Ensure that the funds raised are allocated according to the plan submitted in your advance assurance application. This includes spending on business activities, preparing for new business activities, or R&D projects.

• Track Spending
Keep detailed records of how the funds are being used to ensure compliance with SEIS/EIS requirements.

Step 7: Maintain Compliance

• Adhere to SEIS/EIS Rules
Ensure that your company meets the SEIS/EIS criteria, including maintaining your qualifying trade and other conditions outlined by HMRC.

• Monitor Progress
Regularly review your compliance status and be prepared to provide evidence of compliance when submitting the SEIS2 Compliance Statement.

Tips for Smooth Share Issuance

  • Be Organised: Keep all documentation organised and easily accessible to avoid any delays or issues.
  • Communicate Clearly: Maintain clear communication with your investors throughout the process to ensure they are informed and reassured.
  • Seek Professional Advice: If you are unsure about any part of the process, consider consulting with a legal or financial advisor to ensure compliance.

By following these steps, you can efficiently issue shares to your investors, maintain compliance with SEIS/EIS requirements, and move forward to the next stage of your funding process.

New content every Monday

No spam. Unsubscribe anytime.