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  • 18-02-2014 9:33am
    #1
    PalLimerick
    Registered Users Posts: 497 ✭✭


    Hi,

    I am setting up a limited company in the UK, this company will promote sporting events. I have capital to invest myself, although i suspect not enough. The company will be a one person company meaning i will be the only director. I hope I explain this clearly so whoever reads it understands.

    I want to look for investors who will invest a small amount each on an event basis. These investors will not own a share in the company, although i will return their initial investment plus a percentage of the profits based on each individual investment.

    These investors may or may not invest in future events. Is it possible or even legal to attract investors in this way. And how would it be set up. Would i be best to contact a solicitor to draft up a general contract ? It might help if i added that the company will be a private limited company. I am not sure if private companies are allowed to seek investors in this manner. I would like any advise any forum member could offer.

    Thanks in advance.


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    #2
    Peterdalkey
    Closed Accounts Posts: 2,091 ✭✭✭Peterdalkey


    If they are not buying shares in the company they are simply not investors!! If they are lending money, you may need some form of a credit licence. As it will operate under UK law, yiou need professional advice from a UK legal professional with expertise in financial consumer legislation.


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    #3
    Nuttzz
    Registered Users Posts: 3,776 ✭✭✭Nuttzz


    without a share they are not investors they are just creditors

    Not sure what the benefit here is to a potential "investor" they put up the cash and seem to take a lot of the risk while you hold onto the company


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    #4
    PalLimerick
    Registered Users Posts: 497 ✭✭PalLimerick


    Peterdalkey wrote: »
    If they are not buying shares in the company they are simply not investors!! If they are lending money, you may need some form of a credit licence. As it will operate under UK law, yiou need professional advice from a UK legal professional with expertise in financial consumer legislation.

    Thanks for you advice, i appreciate it.


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    #5
    PalLimerick
    Registered Users Posts: 497 ✭✭PalLimerick


    Nuttzz wrote: »
    without a share they are not investors they are just creditors

    Not sure what the benefit here is to a potential "investor" they put up the cash and seem to take a lot of the risk while you hold onto the company

    Thanks for your advice, it is appreciated.


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    #6
    jimmii
    Registered Users Posts: 14,810 ✭✭✭✭jimmii


    I am involved with a company in a different sector that works in a similar way. What they do is set up a company for each event and then people buy shares in that company while they still control the main company and then at the end of each event the profits are distributed amongst the shareholders. They are a relatively small company (less than 10 from what I can tell) but I think the way they have it structured would next to impossible for a person to do alone. Its basically a crowd funding have a look at other companies already doing that to see what set up they use.


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    #7
    pedroeibar1
    Closed Accounts Posts: 5,108 ✭✭✭pedroeibar1


    Redeemable preference shares with no voting rights. Not complex, but you need legal advice.


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    #8
    Peterdalkey
    Closed Accounts Posts: 2,091 ✭✭✭Peterdalkey


    These investors will not own a share in the company, as stated by the OP, but in fact it may well be the way to go as suggested by pedroeibar. OP definitely needs proper professional UK advice.


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