Investment Memorandum Template

Investment Memorandum Template


If you’re thinking of starting or expanding a company then one of the first documents you’ll need to create is an Investment Memorandum. This is essentially a legal document drawn up by an approved Company Secretary outlining exactly how and when your company will be investing its profits. In many cases these forms are drawn up by a company’s non-executive board but can be drafted by a company’s directors if they so wish. They should be approved by your Companies Secretary and produced to the relevant stakeholders for their attention. Once you’ve completed your Investment Memorandum, it’s time to get a document that can be used for tax purposes – a Company Tax Memorandum.


A Company Tax Memorandum is required from April 2021 and covers all investment proposals, both domestic and international. These documents outline exactly how the profits of your company will be invested, and if any dividend (or other return) is required to be paid out to your shareholders. Your investment proposals must be presented in the most favourable form, with the least amount of tax implications possible. You want to ensure, therefore, that your annual income statement, profit and loss statement, and all supporting documentation is complete, accurate and provides all the necessary information to give your tax advisor’s the best advice possible on your individual circumstances.


Whilst it’s very important that you understand the tax considerations that are inherent in all your financial proposals, these documents must also be clear, accurate and complete. Whilst it may be tempting to try and cut back on spending and reduce your taxable income as much as possible, this approach could be counter-productive and open to penalties and claims being made against you. It’s essential that the Company Secretary approves all the documents that you send out for filing, and that they’re signed and dated by someone who’s had professional training in these matters. If not, then you could find yourself facing the prospect of huge fines and even greater losses…not something that you want on your conscience!

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