In October 2014, the BVCA published a revised version of its Term Sheet model, the subscription and shareholders` agreement and articles of association, as well as an accounting meeting on the treatment of preferred shares (either in the form of debt or equity in the company`s financial statements). In September 2015, the model articles of association were amended to amend the Companies Act 2006 as regards the legal requirements applicable to companies in the event of share buybacks. The BVCA model documents were developed for use in a Series A funding cycle. They provide for a significant investment made in whole or in part by investors. The BVCA believes that the standard documents are not appropriate for use in a start-up funding cycle. These rounds are usually documented using shorter form documents, either replaced or updated for an A-series round. Exclusion of liability: 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 obtain legal advice before using the documents. These documents serve only as a starting point and must be tailored to your specific legal and business requirements. None of these documents should be construed as legal advice for specific facts or circumstances. Many law firms, networks of entrepreneurs and other organizations offer documents adapted to the needs of seed investments available on the Internet.
Due to its great diversity and the diversity of seed investment conditions, the BVCA makes no concrete recommendations on the most appropriate suite. These documents have been prepared for use in a Series A funding cycle. They provide for a significant investment made in whole or in part by investors. You do not lend yourself to seed investments and for more information to help entrepreneurs in this area, see the drop-down tab on the right. However, when selecting a suite for a seed funding cycle, the following factors should be taken into account: the subscription and shareholders` agreement has been designed for signature as a contract as is, thus avoiding the execution formalities required for the act. This approach is usually supported by the lawyer`s opinion (available here) with the cavee that one should always get specific legal advice for each situation. Practical Law has also prepared draft model articles of association and subscription and shareholder agreements. It is an excellent and beneficial complement to the documentary suite.
Classification of shares: Accounting standards (including international and UK accounting standards) establish principles for the presentation of financial instruments as liabilities or equity. . . .