What Seed Round Legal Services Cover
The seed round is the first significant stage at which an external investor enters a startup and new shares are issued. The legal basis of this stage is formed by Articles 136, 137 and 140 of the Law on Entrepreneurial Societies, which regulate the types of shares, the issue of new shares, the partners' preemptive right and supplementary contributions. Our service includes preparing the draft issue decision, running the preemptive purchase procedure and checking the consistency of the documents with the investor, so that the transaction follows precisely the procedure established by law.
Types of Shares and the Issue of New Shares
Article 136 of the Law distinguishes placed, issued and authorised shares. A share is considered placed if the society has issued it to another person in exchange for a definite consideration, regardless of whether the society has received that consideration. Shares in respect of which a placement decision has already been taken are issued shares — they are recorded in the registry and do not create rights and obligations until placement. An authorised share is one that may be issued and placed in the future; its amount, class, proportion in the capital and nominal value must be reflected in the founding agreement.
Within the authorised shares, the issue decision is taken by the partners or by an organ authorised by the charter or by a decision of the partners. The decision must contain the number of shares, their nominal value, where such a value is set, and the class of the shares; it may also include the placement period, the minimum price or other conditions. Unplaced shares may be cancelled, which may in turn entail a reduction of the number of issued shares — in that case the management organ makes the corresponding amendment to the founding agreement.
The Law also allows shares to be issued from the property of the society: in a case provided for by the charter, and in accordance with a decision of the partners, shares are issued to the partners proportionally, without a demand for contributions. At the same time, shares of one class may not be issued to partners holding shares of another class, unless the charter provided for this possibility before the issue or the holders of the class to be issued consented by a majority of votes.