What's an application to subscribe for shares, and when do you need it?
You can give this to investors wanting to subscribe for your first ever shares in your business. (Investors are only called 'subscribers' at this stage.) The application letter essentially records what they are willing to invest in your business in return for the shares you're offering them.
(Please note that this application is drafted for use by private limited companies and is not suitable for public or listed companies.)
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What else might you need?
You'll need this record to accompany the board minutes and resolutions proposing the allotment of the first share issue in your company.
Our checklist for issuing and allotting shares is a good starting point for finding out more on this topic. Other documents you'll need as part of this fundraising activity include share certificates, an early stage shareholder agreement (sometimes called a subscription agreement) and our early stage seed-funding articles of association – the latter being your company's rule book (you may well need to adjust some of the rules that you originally started out with in this document to ensure you end up with the right controls and permissions that you need to make decisions for your business – without avoidable interruption or intervention from your new shareholders). There will be board resolutions and shareholder resolutions for first share issues that you'll also need to complete – they're not particularly complex or time consuming, so don't worry.
We also recommend, if you're at the early stages of talking to investors, that you take a look at our guides to cofounders and vesting arrangements, to the valuable SEIS and EIS investor tax benefits that you can offer to entice people to come on board more readily, and the guides on what investors look for and how to lawfully promote your business to investors – since the financial promotion rules around how you can draw attention to your investment pitch deck are very strict and not always obvious.
These rules get a bit complex, so we also have a short guide to the exemptions to the financial promotions rules, which should clarify a lot of the technical terms and rules. Crowdfunding is also covered in our guidance section – there are rules around how this works too; and in the case of crowdfunding, the funding platform will often act as a coordinating (or 'nominee') shareholder for everyone else, and often manages a lot of the paperwork and administration involved in your share issue for you.