SMP

TAKE A SEAT

England

Typical legal form for start-ups

private company limited by shares (ltd.)

Brief information

Due to its simplified corporate governance and its low share capital requirement, the ltd. is the most popular legal form for start-ups in England.

A PE/VC Fund can in principle accept an observer seat, whereby the contractual structure is decisive in the individual case. The observer may not exercise any influence on the management decisions.

The ltd. is organized as a monistic entity. A Board of Directors manages the ltd. The Board of Directors is divided into executive and non-executive directors. There is no separate supervisory body. However, investors can be granted observer seat status by contract. The observer may attend meetings of the management but is not entitled to vote.

A PE/VC Fund can in principle accept an observer seat, whereby the contractual structure is decisive in the individual case. The observer may not exercise any influence on the management decisions.

Other legal form

public limited company (plc.)

Brief information

A conversion from an ltd. to a plc. is unusual. It generally only occurs in the event of an IPO.

A PE/VC Fund can in principle accept an observer seat, whereby the contractual structure is decisive in the individual case. The observer may not exercise any influence on the management decisions

The information in our toolbox provides managers of private equity or venture capital funds with an initial overview of certain framework conditions in the respective country. It does not provide advice on the law of any country, neither does it substitute such advice. Before taking over a board seat in a portfolio company, it is at all times necessary to seek expert advice. Our team is happy to assist you with all questions at any time.

In collaboration with: MJ Hudson

Sources: Wegen/Spahlinger/Barth, Gesellschaftsrecht des Auslands 2. EL Januar 2018