Setting up a new company with foreign investment

[Martin79]

Hi All,

My name is Martin and I'm new to this forum so please be patient with me :cool:

I'm ready to set up a new company, got investor in Italy who already gave me 20K for promised 5% shares. I'm trying to solve and understand most of the legal paperwork myself before dealing with accountant or solicitor. My questions are:

1. What is the deal with company authorised capital? Can I create 1000 shares £1 each and give £50 shares to my investor even if he paid for them 20K?

2. Is my investor meant to be a company member if he is having 5% shares form the very beginning?

3. Does he need to sign any articles of association or other paperwork? (he doesn't want to be involved, he is a silent investor)

4. If so can he sign it form Italy or does he need to be in here in front of the legal representative to sign?

Thank you in advance for all the comments. If you know any good solicitor and/or accountant in London - Sutton (where I'm based) or any telephone or net based one, please let me know.

Looking forward to all posts...

Martin

[Shahkti]

1. What is the deal with company authorised capital? Can I create 1000 shares £1 each and give £50 shares to my investor even if he paid for them 20K?

- You create as many ordinary shares as you think you'll need at a nominal price of say £0.01p then sell them to investors at a premium of whatever the company is worth - in the above example the premium is £49.99. But if you agreed 5% of the company then with 1000 shares he gets 50.

2. Is my investor meant to be a company member if he is having 5% shares form the very beginning?

- Yes s/he is a member (=shareholder). In case it is the real question, s/he is not a Director.

3. Does he need to sign any articles of association or other paperwork? (he doesn't want to be involved, he is a silent investor)

- Yes, have and sign a shareholder agreement. This can be short (2 pages). The M&A normally says what can be done with shares, but the agreement sets out the price and number.

4. If so can he sign it form Italy or does he need to be in here in front of the legal representative to sign?

- It can be done in Italy and returned by post. No witness required.