Legal and warnings

Legal Entities

Service providers

Our Rules

Legal and warnings

Doing silly things
can be dangerous

Our warning to everyone
  • If you do silly things then you are likely to experience problems.
  • Any money that you invest may be lost, whatever projects or scheme you put it in.
  • Make sure that your liability is limited to the sum you have invested.
  • Never put all your eggs in one basket, never invest more in a single type of investment than you could afford to loose.
  • Newer and smaller businesses may have considerable higher risks, but  also the possibility of very much higher gains.

Do not do

Do not
  • Sign unlimited personal guarantees of any type, especially bank guarantees.
  • Believe that anyone that advises you has your interest exclusively in mind, nearly everyone has a means of benefiting or an agenda of their own. There is no such thing as a truly independent advisor.
  • Share inside information you come across, confidential information on any business you are involved in or any of the individuals involved, with anyone, whoever they are.
  • Offer financial advice or breach the censorship laws in Britain relating to who you can and cannot tell about a business opportunity.
  • Break the laws of the country you are in.

Don't forget that the tax man will want his share of the profits of your investment and  effort.

Why we can do what we are doing without breaking the law

In Britain Censorship laws exist as a part of the Financial Services and Markets Act that limits the information that people can be told about a business or investment opportunity that they could become involved. There are a large number of exclusions that allows 'chosen' or the 'right type of people' to be allowed to benefit from the information while restricting it from others.

In addition there is a more general exclusion that applies to non profit angel networks if set up in a particular way. We qualify fully under this provision which is contained in statutory instrument (order) 2001/1201 section 40.  In order to gain exemption under this it needs to be:-

  • A body corporate.
  • Principle objectives including one of two objectives that equate to the first two objects we have.
  • The above objectives not carried on for gain (ie non profit), although 40.2 allows charges that allows costs to be covered.

The exemption this provides is wide activities of the kind or connected with arranging deals in investments.

A number of government backed development agencies and the like have taken the same model as we have chosen, and we have used them as a guide to what practical exemption this provides to us.

Another exemption allows a communication between one participant or potential participant in a joint enterprise to another, in connection with or for the purpose of that enterprise. So we are able to identify who are potential participants and either introduce them or set up an interest group or club for them, and they can then arrange their own deals, with or without our further help. Similarly we can introduce a member to a business and they can negotiate their own deal.

 

As no one knows what the law is on some of the areas we are involved in, we have to try to put out any fire ahead of it becoming visible to us.

There are additional exceptions that apply to those who qualify as either certified or self certified wealthy investors or sophisticated investors, and to all members of organisations made up of predominantly these people. This is the exemption that the commercial angel networks use.  Our Gold and Platinum members and all members of Property Club International, fully qualify under this exclusion.

The Financial Services and Markets Act  is huge and has a vast number of modifying orders, not all of which can be identified, so no one knows exactly what this act says or means. There are a lot of other exclusions that also apply to specific aspects, that come into play once we have overcome the first obstacle legally.

As no one knows what the law is, and the FSA, the body that supervises it won't answer  questions, other than isolated points of law, there is no way that we can ensure any more than others that we are not going outside some aspect we are unaware of.  To protect ourselves and members we have taken the view that we should only put on live presentations by business owners, where a direct offer to invest may be made, to Gold and Platinum members. We have also introduced a programme to empower more people to understand and be able to join this group.

Franchises are exempt, it appears you can talk to whoever you like about them. JVC's are very similar to franchises in many ways.

In our view the JVC projects are outside the Act, and a detailed explanation of the reasoning of this was sent to the FSA who were not willing to answer.  However we suggest that  members only discuss these projects with non members when they themselves are a participant or potential participant.