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Company Structure Section 3 n Shareholders' Agreement/Investment Agreement (often referred to as a "Founder Shareholders' Agreement" at this stage) – this is usually entered into by the various parties. This sets out the relationship between the shareholders (ie their individual rights and obligations) and also how the company will operate and be managed. n Articles of Association – this is a public document which must be filed with the Registrar of Companies at Companies House. The Articles essentially govern the internal workings of the company and set out the rights which attach to the shares in the company (and may set a cap on the amount of shares it can potentially issue at that stage). n Memorandum of Association – the Memorandum of Association simply contains a statement of intention of each of the first shareholders to; (a) form a company and; (b) take at least one share in that company. This is also a public document and must be filed at Companies House. n Employment Agreements – will you, as a researcher, be an employee or consultant of the company or seconded to it and, if so, on a part-time or full-time basis? Will the company need any other employees? Will the company have sufficient funds to pay salaries? The terms of such arrangements will need to be documented. n Facilities Agreements – will the company require access to offices and or laboratory space? Such arrangements will almost certainly need to involve the Head of Department or equivalent and may form part of a wider services agreement with the research institution backing the spin-out. As well as providing office and laboratory space, institutions may also offer other services such as book-keeping and the production of accounts during the early stages of the spin-out's life and also access to incubator premises. All these matters are areas on which you should get independent legal and accounting advice. There may, in particular, be tax implications and this is looked at in further detail in Section 7 – Tax Issues. 18

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