Attracting investment in beauty

A few months ago, a client contacted us. He had been developing his own cosmetics brand for quite some time. The company expanded steadily. The brand became widely recognized in the market. The client has registered his own trademark. But it was time to really scale up. This required significant investment. The client approached us for assistance in supporting the investment project. 

We started our work with defining the client's specific vision for the structure of his business after attracting partners. Of course, there was an overarching vision. However, as they say, the devil is in the details. In this regard, we began to clarify certain details. We sent a questionnaire to the client, met with them several times, and spoke on the phone. Based on the findings, we created a summary outlining the specific conditions under which the client is willing to let partners into his business. 

Then the negotiations with partners began. They proposed a number of conditions that required a compromise. We were able to reach an agreement that was acceptable to both parties after several meetings. 

We developed documents based on the desired outcomes of both parties involved in the new investment project. This was the most difficult stage because we needed to formalize a number of non-standard solutions within a legally valid legal framework. According to the terms of the agreement, our client would continue to be the primary business partner. In this regard, a number of issues needed to be addressed in a separate corporate agreement, which, unlike the charter, allowed us to secure the imbalance in relations with one specific main party. 

Another task was to prepare a package of documents to attract new investors to the company. The current partners became involved in the work because they wanted guarantees that the inclusion of new investors would not affect their rights in any way and would not result in a reduction in their ownership shares of the authorized capital. We had to create mechanisms for new investors to join the corporate agreement that was developed at the beginning of the project. At the same time, the client wanted to retain the right to select new investors for the project. According to current OOO law and judicial practice, one of the principles of organizing a business as a limited liability company is a stable composition of participants. It means that all changes in the composition must be approved by the partners. However, the law allows the charter to remove the shackles and allow for free circulation of shares. As a result, the majority of our efforts were focused on developing the terms that govern the procedure for bringing in new investors. 

We consider that the results of our work are the creation of a charter, a corporate agreement, and a number of document forms. These will be useful to the parties in the process of working to implement certain terms of the corporate agreement. 

Of course, we did not just provide the client with developed documents. We also addressed all technical aspects of the project. We accompanied the signing, advised on the tax requirements for the registration procedure, and organized the process of filing and receiving documents after registration. 

Currently, the legal entity has already received the first tranche of investments, and the work is actively continuing and gaining momentum.