Maintaining board approvals and signed grant agreements
- Maintaining an accurate, up to date cap table
- Recording board approvals for every grant, as required by most company law
- Tracking vesting schedules and updating vested amounts
- Filing scheme paperwork, such as EMI notifications to HMRC within 92 days of grant
- Keeping signed grant agreements and option certificates on file
None of this is optional in a legal sense. Most jurisdictions require board or shareholder approval before shares or options are issued, and missing approvals can make a grant void or create disputes later, which is why accurate cap table management starts with the approval record.
Preventing documentation gaps before fundraising or exits
Investors run legal due diligence before every priced round. A messy cap table, with undocumented grants or inconsistent vesting records, slows the round and can lead to a lower valuation or extra warranties demanded by the investor, a risk equity management software is built to reduce.
At exit, buyers need a clean, verifiable list of everyone entitled to proceeds, including the split of founder equity. Fixing a poorly maintained cap table during exit negotiations, under time pressure, is far more expensive than maintaining it properly from the start.
Common administration errors
| Error | Consequence |
|---|---|
| Grant made without board approval | Grant may be void or need retroactive ratification |
| EMI notification missed deadline | Loss of tax-advantaged status for that grant |
| Option pool shares not reserved formally | Overallotment or shareholder disputes |
| Leaver's unvested shares not clawed back | Diluted ownership sitting with someone no longer contributing |
Good practice
- Update the cap table within days of any grant, exercise or transfer, not at the next round
- Store signed documents centrally, not scattered across email
- Run a quarterly reconciliation between the cap table and the share register
- Use software or a lawyer for anything beyond a very simple structure
What founders ask about record keeping
- Who should own equity administration at a small startup?
- Usually a founder or the finance lead in the early days, with legal support for scheme filings, moving to a dedicated function or software as headcount grows.
- How often should the cap table be reviewed?
- After every event that changes ownership, and at minimum before any funding round or board meeting.
General information for founders, not legal or tax advice. Thresholds and rates change, so confirm the current position with an adviser in the relevant country before granting.