Yesterday saw me wading through more legal paperwork, there is so much to get through, but that is because setting up a business is not actually that easy or indeed that quick. This is the area filled with so called ’Red Tape’ but not all of it is ‘bad’ as some people infere. Indeed you need this ‘tape’ when setting up and you need to make sure it is all present and correct so to speak. This is further complicated if you are setting up a collective style business like AppyNation. We have 7 shareholders at the moment and in order to get cracking with other key things, like setting up a bank account, registering for VAT and informing Her Majesty’s Revenue and Customs (HMRC), I took temporary control of the company’s equity (ie all of the shares) as a holding position whilst we all agreed our terms of business and the arrangements between the shareholders.
This takes the form of a shareholders agreement, and handily we are in the last stages of agreeing this between us all right now. Tomorrow’s job is one final read through. Most if not all legal agreements spend equal amounts of time and words describing what will happen and also what must happen in the case of disagreement and the ensuing outcomes. These documents can be long, but they are always thorough. Our shareholders agreement is curently 41 pages. I have seen longer and I have also seen ones a little shorter, but they are essential and it is important for everyone who is a shareholder to understand the document so that they know what they are signing up for!
Once this is all agreed, we can organise the transfer of the shares, currently held by me, to the other shareholders in the group and that all means more paperwork, covering the transfer of shares with accompanying share certificates for all and the entry of all of this information at Companies House which is the place where you have to register who actually owns the business and who are legal directors of the business . James, one of the AppyNation team was amazed at the amount of paperwork that was being produced and even more amazed at the cost of doing all of this. Yep, it costs and if you don’t have a firm idea of what you want/need and deal with the issues in an efficient and timely manner, costs can escalate and get out of control. Choosing a good set of lawyers with experience is essential. In my experience this should not be a casual choice. Whilst local solicitors will be able to help you with your day to day issues, if you ever actually get in a mess and notably buying and selling your house, you really should seek out the specialists in entertainment. We are working with Osborne Clarke, with whom NESTA work closely, but I have worked and continue to work in various shapes and forms with Sheridans, Harbottle & Lewis, Olswang and Wiggin all of whom are just brilliant at ‘all things games related’. None of this is particularly cheap, so always make sure you have some money put aside when you are planning your business set up.
And none of this earns you any money! That bit is still the hardest and so it is now back to product development and marketing plans, oh yes and that mission statement which is gradually being honed into something snappy and meaningful to all of us!
See you tomorrow I hope, once I have read the 41 pages of our shareholders agreement