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Different ways of raising money

The most common ways of raising money for your business are issuing Shares in the capital of a company (sometimes also referred to as stock, for example in relation to US companies). Shares in a company give to the holders, known as shareholders, rights in relation to that company such as to vote, to receive dividends and to a return of capital. Holders of shares in a company own that company and the company, not its shareholders, owns the company's assets. and borrowing money. This section will help you to understand the key differences between the two options, and decide which might be best for your business. It also explains which A collective name for the directors of a company. The board is usually the primary day-to-day decision-making body of a company.and In relation to a company limited by shares, means a person whose name has been entered in the register of members of that company as a shareholder in that company. approvals are needed to issue Shares in the capital of a company (sometimes also referred to as stock, for example in relation to US companies). Shares in a company give to the holders, known as shareholders, rights in relation to that company such as to vote, to receive dividends and to a return of capital. Holders of shares in a company own that company and the company, not its shareholders, owns the company's assets. or borrow money.

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Choosing between issuing shares and borrowing

  1. 1.How do I choose between issuing shares and borrowing to raise money?

Considering the legal process – shares v borrowing

  1. 2.What difference does it make to the process I need to follow if my company issues shares or borrows?

Impact on a company's ownership – shares v borrowing

  1. 3.What is the impact on my company's ownership if I choose to issue shares or borrow?

Impact on the Board – shares v borrowing

  1. 4.What is the impact on my company's board if I choose to issue shares or borrow?

Impact on cash-flow – shares v borrowing

  1. 5.What is the impact on my company's cash-flow if I choose to issue shares or borrow?

Security and shareholders' personal liability – shares v borrowing

  1. 6.Will it make a difference to security if I choose to issue shares or borrow?
  2. 7.What is the impact on personal liability of my company's shareholders if I choose to issue shares or borrow?

Impact on tax – shares v borrowing

  1. 8.Will it make any difference to my company's tax position if I choose to issue shares or borrow?

Changing agreed terms – shares v borrowing

  1. 9.If I wish to change the terms agreed to raise money, will it be easier if my company has issued shares or borrowed?

Comparing how share investors and lenders engage with businesses

  1. 10.How will a share investor or lender engage with my business after we have raised money?