Spin out companies
Where the University’s IP is licensed or assigned to a Spin Out Company, there are different considerations, since the ‘price’ of such a licence or assignment is the allotment of shares to the University and Academics (pursuant to the University’s IP Policy). Often the IP will initially be licensed to the Spin Out with assignment at a later date upon the achievement of specific milestones.
The procedure for the establishment of a Spin Out Company consists of 3 stages, each with separate legal documents. The process and documents are described in more detail in the Guide to Spin Out Companies.
Stage 1
A shell company is acquired and the academic founders subscribe for shares in the Spin Out (at nominal value).
Stage 2
University licences IP to the Spin Out in consideration for shares. The terms are set out in a Licence Agreement.
Stage 3
Investors subscribe for shares for cash. Legal Agreements include:-
- Shareholders' Agreement: regulating the rights of all the Shareholders.
- New Articles of Association: regulating how the Company will be operated
- Directors’ Service Contracts: regulating the duties of the Directors.
- Facilities Agreements: regulating the terms of which University equipment may be used.