Issue link: https://htpgraphics.uberflip.com/i/246991
Company Documentation Section 6 SPECIMEN RESTRICTED ACTS issuing shares in or options over shares of the company, or altering rights attaching to those shares; n increasing borrowings over pre-agreed levels, making loans, or giving guarantees; n n changing auditors, accounting reference date or registered office; n changing the constitution or the business of the company; n selling or letting assets which form a material part of the business; n entering into contracts or acquiring assets above a pre-agreed value; n hiring and firing employees (or at least senior employees), appointing and removing directors or agreeing remuneration levels; n creating or acquiring subsidiaries; n diverging to any material extent from any agreed financial budget. The company's management team may be restricted from competing against the company. This may include not recruiting the company's staff or customers for a period of time following the date on which they cease to be employees and/or directors of the company. These restrictions may not be asked for at the spin-out stage, especially if you are remaining as an employee of the research institution, but they may be asked for later, particularly when outside investors become involved. An Investor is likely to want warranties from the management team about key matters. These may cover areas such as information in documents on which the Investor has relied in making its investment in the company, such as a Business Plan or an Accountant's Report, key areas of the business and the personal good-standing of the management team. Warranties are not always sought at the spin-out stage but it is important to be aware that you may well be required to give warranties when external investors commit funds to the project. Given the financial risk of being sued under warranties, the management team will normally seek to limit their liability under the warranties by setting a threshold before a claim may be brought and a time limit within which 38