THE LAUNCH OF COYSDC Limited Your chance to become a shareholder

ComeOnYouSaints.Com (COYSDC) was brought live and kicking into this world in 1996 as an offshoot from a degree project. At the time we literally had three readers, myself and two other online friends just testing the water - a long way from the thousands of readers and three million plus hits a year site it is today.

Although it was only intended to be a temporary site, at the time the Saints had no other presence on the web. The official site was a long way off, and word began to spread once a message board was added and by the next season we had a small but thriving online community which grew week on week.

Things snowballed from there and soon it became too much for one person to maintain. So four years ago regular reader and contributor Rich Lindsley joined up as co-editor. In 2000 we joined the Rivals network until they decided rugby was not for them so we moved to our current residence within Sportnetwork.

Towards the end of last season we decided, in talks with some other long term readers and contributors that it was time to take the next step in spreading the responsibility and ownership of COYSDC to those who have its best interests and its future health at heart. By doing this as a share issue of a newly formed limited company not only do we ensure the future of COYSDC but it also allows us to explore other long term aims (and revenue streams) we have had under the same COYSDC umbrella such as a paper version of the site (for technophobes) and a couple of books we have had in the pipeline for the last few years. Charity has always been central to the site with involvement in various fundraising activities over the years and will, within this new setup, remain at the core of our activities.

With all this in mind last month COYSDC Ltd was born. Now its over to you.

Chris Gleadell 

1/10/03

The meeting of minds

In attendance were Stockers, Chris (the then Saints Ed), St Marlowe, Broonie, Westonfavellsaint and Ballagher. A chartered surveyor, an IT manager, a salesman, a solicitor and two accountants (in that order). As you can imagine, we had a whale of a time.

The point was, we wanted to bash out how to get this things off the ground. After a good discussion, followed by the ironing out of some administrative points, this is what we’ve come up with.

Legal constitution

We have now formed a private company limited by share capital (so COYSDC Ltd. now exists as a separate legal entity). There were other options available but, briefly, this was agreed to be the sensible option for the following reasons:

· The structure is simple and inexpensive (both to set up and administer);

· It provides the organisation with the ability to introduce some initial capital.

It’s worth pointing out that, whilst part of what the organisation hopes to achieve is to raise money for charity, the set-up is not one which could gain charitable status with the Charity Commission.

The proposal

At present, the company is owned jointly by Rich and Chris. The company has 50,000 authorised shares. The proposed idea is, that on 31 October 2003 the company will issue £1 ordinary shares at par (ie. each share will cost £1) to anyone wishing to subscribe (a minimum of ten shares must be purchased). These “issued” shares will be used to buy the business that we currently know as “ComeOnYouSaints.Com” which is currently owned (in an informal arrangement) equally by Rich and Chris. For every share purchased, the same number of shares will be issued at no cost to Chris, Rich and Stockers in a ratio such that they will subsequently own a proportion of the company as follows:

Chris 22%

Rich 22%

Stockers  6%

Also, 50 shares will be given to Sport Network in appreciation for their support over the last year and a half.

Half the proceeds from the share issue will be paid to Rich and Chris for the old ComeOnYouSaints.Com business. The other half will be placed in the company’s bank account.

Example

This is not the easiest concept to get your head round. (Or, put another way, it baffled the two chartered accountants at the meeting no end but that’s partly because they started to mentally draw “T accounts” in the air – honestly you don’t want to know.)

Suppose subscribers (who will offer to buy different numbers of shares of course) in total amount to £1,000. Following the share issue, the ownership of the company will be as follows:

If you are interested, you can now place an offer to purchase shares in COYSDC Ltd. You will find a prospectus by following this link PROSPECTUS. Given the nature of the enterprise, it seems daft that you can’t register on-line but, as yet, we do not have the facility to accept electronic payment.

Directors

All companies, by law, must have a board of directors. It is their responsibility, among other things, to safeguard the assets of the company. The company will be governed by standard rules. We can provide a copy of the company’s rules (called the memorandum and articles of association) to anyone should they wish to see them.

It was agreed at the meeting that the directors should, initially be as follows:

Chris

Rich

Stockers

St Marlowe

AN Others (see below)

Chris, Rich and Stockers are obvious. St Marlowe was asked to be an initial director for his commercial experience. Equally, it was felt neither necessary nor desirable that all present at the meeting should be appointed to the board. Hence Broonie, Ballagher and Westonfavellsaint (although re the latter, see below) are not directors.

The board has been formed with certain individuals there purely to get the whole thing off the ground and not in an effort to be elitist or to exclude anybody. All present at the initial meeting feel it very important that two more people (ideally well known members of the coysdc community) should be included as directors. Therefore, we would like you all to nominate anyone that you think would be suitable for this.

We don’t regard these people as representing the rest of the board insofar as we don’t perceive there being a “them and us” attitude. It’s really more a case of saying that, now the initial admin has been sorted, it’s everyone’s company.

Directors are entitled to resign at any point if they so wish. According to the rules of the company, all the directors must resign at the first Annual General Meeting and then each year two directors must retire by rotation (although they can be reappointed if there is no opposition to this). It should also be pointed out that, ultimately, the directors are accountable to the shareholders in the Annual General Meeting where (and I really can’t imagine it would come to this) they can be removed from office. Sorry to get heavy but it’s worth knowing.

In addition to the directors, the company has appointed a company secretary (David Neal – otherwise known as Westonfavellsaint). The company secretary deals with the administration of such things as share issues. David is a chartered accountant and is therefore ideally suited to this role. The difference between the company secretary and a director is that the former does not have a vote on the board of directors.

After set up – trading and profits

Firstly, bear in mind that the sums of money are not going to be fantastic in the early stages. 

The obvious income stream is from the sale of advertising space on the site. Another idea is a paper version of COYSDC (for technophobes). Chris and Rich have talked about a couple of books but, and this is the material point, it will be OUR company and it’s down to all of us, as the decision makers, to explore other revenue streams which COYSDC might exploit. And lets not forget this does not strictly have to be Saints or rugby related. We can look at other avenues if it keeps COYSDC healthy and increases our donations to charity.

What we propose will happen is that a draft result (ie. profit) for the year will be worked out. Then, following a vote by members, 30% of the draft figure will be donated to a charity (or, if things take off and there's quite a bit there, there may be more than one charity).

A further 10% will be paid to "active workers" at the discretion of the directors. These workers may or may not be shareholders. It will be a small recognition of the effort they have put into the site over the year. It should be stressed that the directors will NOT be paid simply for their role as directors.

The remainder is the actual profit for the year, of which 50% of what's left (or 30% of the original draft profit) will be paid as a dividend to shareholders. The rest is retained.

This is not a model for rapid growth but it strikes a balance in meeting the objectives.

Later changes in shareholdings

After the initial subscription, shareholders are free to sell their shares to other shareholders initially (except for Chris and Rich who have agreed not to increase their overall percentage stake in the company) at a price agreed by both parties. The process for transferring shares is not as easy as you might think (largely because the company has to keep a track of who owns the shares) but further details of how this would work are available on request.

We do not propose a further share issue for at least eighteen months. There are various reasons for this but the main one is that it is very difficult to evaluate a fair price for such new shares. In time, the directors and shareholders may want to look at this again.

What next?

At this point, it’s over to you. There are two things to think about.

Nominations for directors – Who would you like to be a member of the board? It’s not for us to set out the criteria other than perhaps to say that formal qualifications or past experience of these things is not a pre-requisite. Whether or not you decide to apply for shares, your view on this would be welcome. A thread on the “planet lom” message board has been set up. Please join in the discussion.

Offer to purchase shares – A formal prospectus can be accessed from the following link PROSPECTUS. If you are interested, you can subscribe for shares by sending a completed print-out of the application form together with your cheque and a stamped addressed envelope. Simply follow the instructions on the form.

If you have questions, first see if they have been addressed in the FAQ The FAQ'swhich we may add to over the next couple of weeks.