Legal audit & preparation for opening up the share capital in a fundraising roundFundraising lawyers in Bordeaux, Paris and Hossegor

1- Preliminary legal, contractual and tax analysis

An in-depth analysis of the company’s situation is an essential step before any fundraising:

• Analysis of the company’s legal structure and the distribution of its share capital;
• Review of the articles of association and of the contractual legal documentation: shareholders’ agreement and existing agreements;
• Verification of the compliance of corporate decisions and governance;
• Analysis of the company’s tax position and the applicable regimes;
• Identification of legal, contractual or tax risks likely to affect the transaction.

2- Audit of commitments and strategic assets

Investors pay particular attention to the legal security of the company’s assets and commitments:

• Analysis of key and strategic contracts (customers, suppliers, partners);
• Identification of clauses likely to be affected by a change in shareholding;
• Verification of the ownership and protection of intellectual property rights;
• Review of the company’s financial and contractual commitments;
• Assessment of risks likely to influence the company’s valuation;
• Support in framing and managing KYC procedures (“Know Your Customer”).

3- Structuring the opening up of the share capital

The structuring of the transaction is decisive in reconciling the interests of the founders, shareholders and investors:

• Defining the terms on which investors enter the share capital;
• Choosing suitable financial instruments (ordinary shares, preference shares or any other securities);
• Organising the financial and voting rights attached to the shares;
• Anticipating dilution effects and future transactions on the company’s share capital;
• Optimising the structuring of the transaction in light of the tax issues at stake.

4- Drafting and negotiation of the investment documentation

A fundraising round involves drafting and negotiating, through to finalisation, all of the key legal and contractual documentation:

• Assistance in drafting and negotiating the letter of intent (“LOI”) or Term Sheet;
• Where applicable, assistance in drafting and negotiating all non-disclosure agreements (“NDA ”);
• Preparation of the investment documentation;
• Drafting and negotiation of the shareholders’ agreement to be entered into by all shareholders and investors, as well as any other contractual agreements governing investments made through shareholder current accounts and any cash contributions, or the buy-back of shares upon a shareholder’s departure;
• Organisation of the company’s governance, the economic and voting rights of the shareholders, the entry of third parties into the share capital and, where applicable, reporting obligations, information obligations and the framework for any subsequent transaction on the company’s share capital;
• Securing capital increase transactions.

5- Setting up management incentive schemes

Aligning the interests of investors and management is a central element of fundraising transactions:

• Setting up incentive schemes for management and teams (shareholders and employees);
• Advice on schemes such as BSPCE (French founder share warrants), free shares or stock options;
• Structuring management packages within a legally secure framework.