Why are equity offers to the public by CrowdCube legal?

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This topic contains 2 replies, has 2 voices, and was last updated by  artbenis 1 year, 11 months ago.

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  • #2838

    artbenis
    Participant

    CA 2006, S.755,756 prohibits share offers to the public by private limited companies?

    How are internet companies like CrowdCube able to legally do so?

    #2849

    Jonathan Lea
    Keymaster

    We expect most crowdfunding platforms rely on CA2006 s756(3)(a) which states as follows:

    “An offer is not regarded as an offer to the public if it can properly be regarded, in all the circumstances, as—
    (a)not being calculated to result, directly or indirectly, in securities of the company becoming available to persons other than those receiving the offer”

    Also relevant will be that as an individual under the FCA Financial Promotions Order you are entitled to receive business plans and make investments through your own decision, provided that you are able to self-certify yourself as either a High Net Worth Individual or a Sophisticated Investor.

    #2851

    artbenis
    Participant

    So the subscribers are treated as individual offerees, not as the public.

    Thank you.

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