Obtaining a branded legal entity
By default, the legal entity that is used for all deals on Odin is “Odin Investments Limited”. This is the entity that sits on the investee company’s cap table.
Each individual deal / SPV is a legal sub-agreement (a separate “Bare Trust”) between this legal entity and the investors for that specific deal. There is no contagion of assets between SPVs for investments held by Odin Investments Limited.
Subscribers on the Core or Headliner plans are able to create their own branded entity and run deals through it. This is set up and administered by Odin for as long as required.
You can call the entity whatever you’d like, as long as the name is available on Companies House. However, it will have to be used for every deal you run on Odin, so our recommendation is to name it after your syndicate, not after the deal you’re doing. “Syndicate Name SPV Limited” is the nomenclature most Odin customers use here. Remember, this is the name that appears on the cap table for each investee company!
Your branded entity will have to be incorporated before we begin the closing process for your first deal on Odin, as it can take up to a day for HMRC to approve it. As such, please let us know the preferred name for your entity as soon as possible. We will then set it up ASAP, provided the subscription contract has been signed.
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Why is a legal entity required?
As mentioned here, Odin uses a United Kingdom Bare Trust to administer your investments. As SPVs wrap up all of the syndicate’s investors into a single line on the cap table, the legal entity is required to facilitate this.
The entity holds the legal title to shares on behalf of the syndicate members, and a share certificate is issued only to the entity. The underlying investors are the beneficial owners of these shares and are provided with documentation outlining this.
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Who sets up my branded entity? Who owns and administers it?
Odin will create, own and administer the entity on your behalf. Odin will also complete all filing required by HMRC and global regulators for the entity.
All branded entities, as is the case with our standard entity (Odin Investments Limited) are dormant, non-operating UK limited companies, and are structured as subsidiaries of Join Odin Limited (which is the sole corporate shareholder of the entity).
There is one sole named director of the entity, who is a director of Join Odin Limited. All filing reminders for the entity are sent to a nominated Odin email address to be actioned by our team. An authorised signatory from Odin is the signatory of all legal documents required to complete an investment. Once an investment is completed, the syndicate lead has power of attorney to sign all post-close documentation.
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What happens if a claim is brought against the entity?
The only legal documents by which the entity is bound are the Syndicate Terms and the specific investment agreements it signs for deals conducted through Odin.
As the entity generates no income and has no assets of its own, there are no practical reasons for a claim to be brought against it. Any claim against the entity by any third party could only be made pursuant to either the Syndicate Terms or the relevant investment agreement. Practically speaking, this means a claim could only be made by Odin (who wouldn’t pursue a claim against itself), another syndicate member, the investee company or another shareholder in the investee company (pursuant to any shareholder arrangements to which the SPV is a party).
The only party from that list where there is a remote scenario of pursuing a contractual claim against the entity is the investee company, and the only type of claim where the entity may be sued through the negligence, wilful default or fraud of an underlying syndicate member, is where that syndicate member has knowingly committed proceeds of crime/laundered money as their investment funds and the entity has perhaps warranted under the investment instrument that funds committed under its name are clean. This is a very unlikely scenario as Odin conducts robust KYC/AML checks on all syndicate investors.
Were this to happen, Join Odin Limited as the platform operator would have its own direct recourse to the investor under the platform T&Cs due to a material violation of terms of use of the platform. The entity itself would not able to sue the syndicate member for cash. Its sole recourse is to that member’s investment, which in the very narrow circumstances described above is justified.
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What happens if I leave Odin, or want to transfer everything to my own separate entity?
There are contingencies for transferring your investors’ assets from the entity you have with Odin to another entity of your choosing, whether you decide to, or if Odin becomes insolvent (more information here).
In either case, Odin would ensure that all necessary documentation and information was passed on to you in order for you to carry out this function appropriately.
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Can I later change the name of the entity if I rebrand my syndicate?
Odin can novate the branded entity and provide you with a document certifying the name change. Simply contact your Customer Success representative and notify them of the new preferred name of the entity.
The more significant part of the workload would fall on you as the Syndicate Lead here, as you’d have to contact all investee companies that you invested in via this entity, and get the cap tables updated and/or investment agreements amended to reflect the new entity name. Obviously, if you hadn’t yet completed a deal with Odin, there’d be no work for you to carry out.
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Why doesn’t Odin offer a branded entity on Base pricing?
There are associated financial and time-related costs involved in the entity incorporation process. For that reason, and because they’re designed for use by customers who are committing to Odin for long period of time and running deals repeatedly, we only offer this benefit to subscribing customers.
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What’s the lifespan of my branded entity?
Your branded entity will remain active in perpetuity until you decide you want to wind it up. Odin will continue to file annually until Odin is acquired, becomes insolvent, or if you choose to transfer the nominee entity into your own ownership.