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‘The Jonathan Lea Network’

 Published 33 days ago

Top 5 Tips for EMI Options

1)      Separate generic scheme rules (that apply to everyone, e.g. when options lapse on leaving the company before options vested) and then bespoke option certificates that include details specific to each option holder such as exercise conditions (for example every year of employment or with reference to company turnover target or individual metrics such as sales targets).

 Published 40 days ago

An unapproved share option scheme (which is now increasingly referred to as a non-tax advantaged share option scheme) provides the right, but not obligation to acquire a given number of shares from a company at a future date for a fixed price.

For the purposes of this article, we will continue to refer to these schemes as “unapproved” schemes because this is how many people still refer to them. Many industrial professionals, however, have adopted the term “non-tax advantaged” in place of “unapproved”.

 Published 75 days ago

HMRC updated its Venture Capital Schemes Manual VCM8560 on 15 March 2021.

The update is regarding Example 3 of VCM8560 which presents an example of a qualifying film company.

The new guidance provides further clarity on how the risk-to-capital condition applies to Film and TV production companies that are seeking SEIS/EIS advance assurance approval.

 Published 124 days ago

Convertible Loan Notes (“CLN”) are loan notes which grant the holder a right to subscribe or convert the loan amount into shares in the relevant company. We will explore the potential benefits and drawbacks of using CLNs in more detail below, but they are often used as a form of bridging facility by start-up companies ahead of a future round of venture capital financing.

Where an investor invests in a company via a CLN, unlike a venture capital investment where equity is issued up-front, the investment amount will be treated as a loan to the company and (subject to the terms of the CLN) there will be an option or right to convert that amount into shares in the company at a later point in time. Another key difference when investing via a CLN as opposed to venture capital, is that the share price and most likely the class of share will not be known at the date of the investment.

 Published 124 days ago

This blog aims to provide a short overview and explanation of contract termination with key considerations for those creating contracts. Throughout this blog, we reference an article by Kira Systems on ‘How to Terminate a Contract’, which includes several useful infographics that demonstrate how to include a termination clause within a contract.