Legal & Regulatory Issues

This section enables you to access up to date information and guidance on relevant tax, regulatory and legal issues relating to the angel investment process. The information which is downloadable includes a Guide to the legal, tax and regulatory issues; Due Diligence Fact sheets and Legal Document Templates. It has been compiled by technical experts who are members of the UK Business Angels Association Technical Committee.

Guide to the legal, tax and regulatory issues

This downloadable guide has been complied by the UK Business Angels Association Technical Committee. The UK Business Angels Association Technical Committee is comprised of experts in financial, technical and legal aspects of angel investing, who are all associate members of the UK Business Angels Association.

The guide takes you through all of the considerations both legal, technical and regulatory when making an angel investment. This guide also addresses many of the questions that may arise when considering angel investing for the first time and includes a detailed overview of tax breaks and benefits.

Click here to download the guide to legal, tax and regulatory issues.  

Due diligence fact sheets

The following due diligence factsheets were drawn up by the UK Business Angels Association Technical Committee. These fact sheets take you through the key aspects of due diligence that you would want to consider when negotiating and making an investment in an early stage business.

Click on the relevant link below to direct you to the factsheet you require.

These factsheets broadly fall under the following categories:

Legal Documentation

The following legal documents have been produced by the UK Business Angels Association Technical Committee, with the specific expertise of Eversheds LLP, Harbottle & Lewis LLP and MBM Commercial LLP.

Once the investment terms have been agreed, these terms will be reflected in long-form documents which will typically comprise those set out below:

  • Investment and shareholders’ agreement: this document sets out the terms of the investment and regulates the relationship of the shareholders once the investment has been completed. It will address the specific rights of the Angel Investor(s), such as rights to appoint directors, to receive information on the business and to veto certain actions of the company as well as usually containing warranties as to the company’s business. A model form investment and shareholders’ agreement appears on the UK Business Angels Association’s website and further information on this document is outlined in more detail elsewhere in these FAQs.
  • Articles of association: typically, new articles of association are adopted on completion of the funding which will set out the company’s internal regulations and deal with its management and administration. They deal with matters such as transfers of shares, dividends and voting rights, and complement the investment and shareholders’ agreement. Again, precedent articles of association appear on the UK Business Angels Association’s website and further information on this document is set out in other FAQs.

You can download templates of these documents by clicking on the titles.