17th August 2011

Raising finance just got easier (well, a little bit, for a few…)

The UK government has introduced measures designed to enable more companies to raise equity finance without the burden of issuing a prospectus.

A prospectus is essentially a formal marketing document containing details of a proposed investment opportunity which is designed to allow investors to make an informed decision before parting with their hard earned cash.  Such a document is legally required before shares in a company can be offered to the public, unless one or more exemptions apply.

With effect from 31 July 2011, the scope of two exemptions has been extended as follows:

  1. the number of persons to whom an offer of shares (or other “transferable securities”) may be made before a prospectus is required has been increased from 100 to 150; and
  2. the aggregate size of the offer that may be made before a prospectus is required has been increased from €2.5m to €5m.

 The above changes, which derive from an EU directive, have been implemented in the UK 12 months ahead of schedule. 

Although any measures designed to help companies raise money have to be welcomed, many small businesses will no doubt feel that far more still has to be done in order to improve access to both equity and loan finance. 

Nevertheless, it is important that businesses are mindful of the possibility of raising equity finance as an alternative to collaring their relationship managers at the bank. 

As a corporate member of LINC Scotland (the national association for business angels in Scotland) and having advised numerous early-stage companies on funding rounds with an aggregate investment value of circa £5m over the past 2.5 years, no-one is better placed in the region to assist in this niche area. 

Kirk Dailly

The opinions expressed in this site are of the author(s) only and do not necessarily represent the opinions of Blackadders LLP.

Blackadders takes all reasonable steps to ensure that the content of this site is accurate and up to date. The site is not, however, intended as a substitute for seeking legal or other professional advice but rather as an informative guide to the services provided by Blackadders and topical legal developments. Site visitors should always seek advice tailored to their specific situation. Consequently, Blackadders accepts no responsibility for any loss or damage suffered by anyone acting or failing to act on the basis of information contained on this site. Downloading of material contained on this site is at the user’s own risk and all necessary virus checks must first be carried out by the user. Blackadders is not responsible for the material found on any web sites linked to this one and links to this site may only be made with Blackadders prior consent.


Blackadders owns the copyright in this blog and all material contained on it. The material on this site may be downloaded for personal use only and must not be altered. Otherwise, Blackadders’ written consent is required before any material on this site is reproduced, copied or transmitted in any way.

Privacy Statement

Information passed to us via this site is kept confidential and will not be disclosed to third parties except if authorised by you or required by law.

© Blackadders LLP 2022

Members of the Law Society of Scotland.

Blackadders Solicitors is a trading name of Blackadders LLP, a limited liability partnership, registered in Scotland No SO301600 whose registered office is 30 & 34 Reform Street, Dundee, DD1 1RJ. Reference to a ‘partner’ is to a member of Blackadders LLP.

Back to Business Legal News from Blackadders Solicitors