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Friends And Family Investment Agreement for the United Kingdom

Friends And Family Investment Agreement Template for England and Wales

A Friends and Family Investment Agreement is a legally binding document used in England and Wales that formalizes investment arrangements between close associates. It outlines the terms of investment, including amount, expected returns, and rights of both parties. The agreement provides protection for both the investor and investee, ensuring clarity on obligations, ownership stakes, and exit strategies while maintaining the informal nature of the relationship. It's particularly designed to balance legal protection with maintaining personal relationships.

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Friends And Family Investment Agreement

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What is a Friends And Family Investment Agreement?

The Friends And Family Investment Agreement is essential when seeking to formalize financial investments between closely related parties in England and Wales. It's typically used when raising initial capital from personal networks, offering a more flexible alternative to traditional investment agreements while still providing necessary legal protections. The document covers key aspects such as investment terms, return mechanisms, voting rights (if applicable), and exit strategies. It's particularly important for maintaining transparency and preventing future disputes while preserving personal relationships.

What sections should be included in a Friends And Family Investment Agreement?

1. Parties: Identification and details of all parties involved in the investment

2. Background: Context of the investment and relationship between parties

3. Definitions: Key terms used throughout the agreement

4. Investment Terms: Amount, timing, and form of investment

5. Rights and Obligations: Core responsibilities of each party

6. Return on Investment: How and when returns will be calculated and paid

7. Duration and Exit: Term of investment and exit mechanisms

What sections are optional to include in a Friends And Family Investment Agreement?

1. Shareholder Rights: Additional rights and protections when investment includes share ownership

2. Board Representation: Terms governing investor participation in management decisions

3. Information Rights: Specific reporting and disclosure obligations between parties

4. Tag-Along Rights: Provisions allowing minority investors to join in sale of shares

What schedules should be included in a Friends And Family Investment Agreement?

1. Business Plan: Detailed plans for use of investment and business strategy

2. Investment Schedule: Detailed timing and structure of investment tranches

3. Financial Projections: Expected financial performance and returns forecast

4. Share Capital Table: Current and post-investment shareholding structure details

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Cost

Free to use
Relevant legal definitions























Clauses





























Industries

Companies Act 2006: Primary legislation governing company operations, share ownership, shareholder rights, and directors' duties and responsibilities in England and Wales

Financial Services and Markets Act 2000: Regulates financial promotions, investment restrictions and requirements. Essential for ensuring compliance with financial regulations in private investment agreements

Law of Property (Miscellaneous Provisions) Act 1989: Fundamental contract law legislation that governs the formation and execution of legal agreements in England and Wales

Consumer Rights Act 2015: Provides protection for consumers in contracts. May be relevant if any party to the investment agreement could be classified as a consumer

Income Tax Act 2007: Governs tax implications for investors, including provisions for Enterprise Investment Scheme (EIS) if applicable to the investment structure

Capital Gains Tax Act 1992: Regulates taxation on capital gains from the future sale of shares or investment returns

Partnership Act 1890: May be relevant if the investment structure involves any form of partnership arrangement between friends and family members

Data Protection Act 2018: Governs the handling and protection of personal information shared between parties in the investment agreement

Money Laundering Regulations 2017: Ensures compliance with anti-money laundering requirements in private investment transactions

FCA Regulations: Financial Conduct Authority regulations pertaining to private investments and ensuring proper conduct in financial arrangements

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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