Skip to content
Gallery
FinOps handbook
Welcome
Building blocks of a Partner team
FinOps Software List
Finance processes
Compliance and tax
Share
Explore
Co. House

icon picker
Equity Management

What is a capitalisation table?

Very simply, it's a summary of who owns the company.
More technically, it's a record of all equity shares, share options, convertible shares and warrants.

What are the common pitfalls?

Poor record keeping and incomplete records, especially in Excel when there are multiple versions of the same information
No idea how many share options have been issued
Don't know how many shares have been issued
No record of what notifications with have been with HMRC for share options
Information are all in different locations
Missed annual notifications - didn't know they had to be done annually
Equity in the balance sheet doesn't reconcile to Companies House
Not having a Register of Members, a statutory obligation from Companies House
Poor implementation of systems, when moving from Excel to a software
Poor processes and handovers between HR and the Finance team and the Legal team

Legal Registers

Along with maintaining a cap table there are three legal registers which must be kept up to date and accurate.
1) Register of Members with details of:
Shareholder/member name
Shareholder/member address
Shareholder/member start date
Shareholder/member leave date
Number of shares held (ordinary, a-shares, non-voting, etc)
Amount paid/consideration
All share allotments
All share transfers

2) Register of Directors with details of:
Directors name (and any former names)
Directors address
Directors date of birth
Directors country of resident
Directors nationality
Directors occupation

3) Register of People with Significant Control (PSC) detailing:
Hold more than 25% of a share in a company, or;
Hold more than 25% of the voting rights in a company.

Corporate governance

Corporate governance is the system of rules, practices, and processes by which a firm is directed and controlled. This becomes more important as companies grow and there are more stakeholders involved who require transparency over decisions being made. In equity management it primarily relates to the below events:
Share authorisation
Option authorisation
New share class
Changing company articles
Variation of share class rights
Appoint/Terminate a director
With the key questions being:
Is a director/shareholder resolution required?
What pass rate of directors/shareholders are required?
Are there any directors/shareholders who must sign for it to pass?

Approved vs Unapproved Share Options

The main difference between approved and unapproved share option schemes is that any approved options exercised will not incur any tax for the employee at the point of exercise, as any tax due is deferred until the shares are sold.
However, approved share options can only be granted to employees that are eligible from businesses that are eligible. Unapproved options can be granted to basically anyone.
One of the most popular approved share option schemes is the Enterprise Management Incentives (EMI) scheme but there are other options, details of which can be found
here
⁠
.

Equity management software

Equity management software can help to ensure your record keeping is accurate and compliance with legal requirements.

General benefits of using software:

Real time cap table
Issues shares instantly: generates resolutions and links to companies house
Generates share certificates
Scenario modelling and building
Audit trail
Guided set up and support
Corporate governance
Legal register automatically updated and submitted

Things to consider when choosing software?

Efficiency: does the software link with your HR system (for new employees, terminations, promotions)? does the software have the correct amount of automation?
Comprehensive: does the software cover the functionalities that you need to manage? Which country does it focus on?
Security: will your information be safe?
Items
Vestd
Capdesk
Carta
Seedlegals
1
Compliance
HMRC and Companies House (EMI notifications, EMI annual return, SH01, CS01)
HMRC and Companies House (EMI notifications, EMI annual return, SH01, CS01)
Everything US
HMRC and Companies House (EMI notifications, EMI annual return, SH01, CS01)
2
Features
Full companies house integration
Focus on setting up and maintaining EMI schemes, eliminating lawyer costs
Agile partnership: Set up conditional shares with equity rewards based on agreed performance milestones
Signatures using DocuSign
Employee and investor access to vesting schedules
Investor relations reporting tools
Multiple level of access for company administrators, lawyers, accountants
Share transactions: Private secondary market and handle transaction

409A valuations: an appraisal of the fair market value of your startup company's common stock
Calculation in accordance with ASC718 for expenses and filing of form 3921 detailing employees who exercised options in the tax year
Focus on fundraising with additional support for convertible loans and advance subscription agreements
SEIS/EIS scheme set up
3
Software integration
​
Potential HR integration with customization of tool
Accounting - Xero, Quickbooks HR - Bamboo, Namely
​
4
Security
​
All data transferred to and from Capdesk is encrypted
Storage and security provided by Amazon Web Services
Daily backups of platform data
​
​
5
Pricing
£1,800/year for 1-10 (new and existing schemes) £3,000/year for 21-40 (new and existing schemes)
£600/year for 1-10 stakeholders £1,200/year for 11-25 stakeholders For quotes over 25+ stakeholders typical rates are per month are £2 per shareholder and £4 per employee There is an additional one-off set-up fee charged at the start of the contract for getting the platform set-up.
Starts at $2,800/year
£39 / month for cap table management with additional costs:
£250 for support with SEIS/EIS
£1,500 for EMI option scheme
£250 for Company policies
6
When to use?
Our preference if looking to get set up on an EMI scheme and maintaining the scheme.
Our preference for UK based businesses already been through a few rounds of funding which has led to a more complex cap table.
Our preference for a US based company
Our preference for a business with a very simple cap table also looking for support in submitting an SEIS/EIS Advance Assurance.
There are no rows in this table
4
Count
⁠

Want to print your doc?
This is not the way.
Try clicking the ⋯ next to your doc name or using a keyboard shortcut (
CtrlP
) instead.