Where the evidence shows that funds are available to your business rather than to you or that funds have already been invested in the business you must provide a company’s house document showing your connection to the business. This document is not needed if the endorsement letter confirms the applicant’s connection to the business.
When considering funds, you must:
- not accept any funds held in a financial institution that is listed in Appendix P
- for any evidence of funds not shown in pounds sterling (£) convert it using the spot exchange rate that appeared on the OANDA website on the date of application
Letter from a legal representative
Where a letter from a legal representative is supplied, which confirms the validity of signatures on each third-party declaration. This must confirm the letter or letters of permission from the third party or parties containing the signatures of the people stated. This can be a single letter, which covers all third party permissions, or several letters from several legal representatives.
The confirmation must come from a legal representative capable of providing the information. This means it must be from a legal representative who is allowed to practise in the country where the third parties or money is.
The letter should clearly show the:
- name of the legal representative
- registration or authority of the legal representative to practise legally in the country in which the permission or permissions, was, or were, given
- date of the confirmation letter
- names of the applicant and third party (and the team member’s name if you have formed an entrepreneurial team)
- letter from the third party is signed and valid
- number of the third party’s identity document, such as a passport or national identity card, and the place of issue of the identity document, and dates of issue and expiry (this is not needed from a venture capital firm, seed funding competition or UK government department or devolved government department in Scotland, Wales or Northern Ireland)
Financial institutions: A financial institution acts as an agent to provide financial services for its clients. Common types of financial institutions include:
- building societies
- credit unions
- stock brokerages
- asset management firms
- They are responsible for transferring funds from investors to companies in need of those funds. Financial institutions fall under financial regulation from a government authority.
Financial regulation: Financial regulations are a form of control or supervision, subjecting financial institutions to:
- local requirements
- restrictions and guidelines
- maintaining the integrity of the financial system
- This is handled by either a government or non-government organisation. Under UK law, most financial service firms who want to do business in the UK must be authorised by the Financial Conduct Authority (FCA) and/or the Prudential Regulation Authority (PRA).
The home regulator
The home regulator is an official financial regulatory body, appropriate for the type of financial transaction required, in the country of operation where the transaction is made.
Money available for investment must be disposable in the UK
- If the money is not held in the UK, all of the funds needed for the investment must be freely transferable to the UK and able to be converted to pounds sterling.
- Money held in an overseas account but in a financial institution regulated by the Financial Conduct Authority (FCA) will satisfy this requirement.
- Money held overseas in an institution not regulated by the FCA must be transferrable to the UK. You must provide evidence to confirm this, such as a document from the financial institution. Banks are not, however, required to guarantee that this money will be transferred.
- For overseas companies not registered with the FCA, you can check for information on:
- Companies House list of overseas regulatory institutions under Worldwide registries
- the International Organization of Securities Commissions (IOSCO) general membership lists
If the funds are overseas and subject to any applicable financial sanctions regime, you must provide confirmation from HM Treasury that the funds are transferable and disposable in the UK.
You do not need to be the sole founders of their businesses. Whilst multiple Innovators in the same company can receive endorsements each applicant must have been endorsed in their own right. For new business applications, each innovator applicant must also be able to demonstrate that they have their own unique £50,000 available to invest in the company.
For example, if two team members are being endorsed for the same business, there must be £100,000 funds, not £50,000.