Board Resolution For Raising Funds Template for England and Wales

It's the formal written record of the directors approving a fundraising activity, whether by issuing shares, taking on debt, or entering a convertible loan agreement. It confirms the board has the authority to proceed, records the terms agreed, and authorises the execution of all related investment documents.

Under section 551 of the Companies Act 2006, directors of a private company need shareholder authority to allot shares unless the Articles confer standing authority. Many private companies grant directors rolling allotment authority by way of ordinary resolution at each AGM. Pre-emption rights must also be disapplied by special resolution unless investors are existing shareholders.

Under FSMA 2000 and the Financial Promotions Order 2005, communications inviting people to invest must either be approved by an FCA-authorised person or qualify for an exemption, such as the high net worth individual or sophisticated investor exemption. Non-compliant promotions are a criminal offence, so the board must confirm compliance before approaching investors.

Where the company is seeking EIS or SEIS advance assurance from HMRC, the board resolution should confirm that the company meets the qualifying conditions (trading activities, share structure, previous investment history). The resolution may also authorise the directors to apply for advance assurance and to issue EIS3 or SEIS3 compliance statements to investors after the fundraise.

Yes. A convertible loan note is a debt instrument that converts into equity on defined triggers. The board resolution should approve the terms of the note, note the directors' duty to consider whether the company can meet its debt obligations, and confirm that the Articles permit the future share issuance that conversion would entail, or that shareholder authority will be obtained before conversion.

Institutional and angel investors usually require a shareholders' agreement and revised Articles alongside the investment. The board resolution should authorise directors to negotiate and execute these documents. Key investor protections such as information rights, anti-dilution provisions, and drag-along rights should be reviewed by the board before the resolution is passed.

Directors must not raise funds by incurring debt or issuing shares if the company is already insolvent, as this may expose them to wrongful trading liability under section 214 of the Insolvency Act 1986. The resolution should confirm a solvency assessment was conducted and that the company can reasonably meet its obligations after the fundraise.

Yes. Under section 580 of the Companies Act 2006, shares must not be issued at a discount to nominal value. The agreed subscription price should be at or above par value. Where HMRC EMI options or EIS certificates are involved, a formal share valuation agreed with HMRC's Share Valuation division may also be needed.