Fund-raising is much more than a financing mechanism: it's a structuring legal act that commits a company for the long term. In a globalized economic environment, where investors, legal advisors and regulators are often located in several countries, the translation of fund-raising documents becomes an essential step.
But beware: this is not just a literal translation. You need to ensure that the legal and financial framework is faithfully transposed into another language... and another legal system.
Complex documents at the heart of your financing strategy
A capital raising usually involves a set of contractual, regulatory and financial documents, such as :
- the term sheet or letter of intent,
- shareholders ' agreement,
- amended bylaws,
- contracts for the issue of shares or convertible bonds,
- valuation reports,
- minutes of extraordinary general meetings,
- confidentiality agreements (NDA),
- or supporting accounting and tax documentation.
Every word counts. A misinterpretation can alter voting rights, exit clauses, anti-dilution mechanisms or founders' obligations.
Translating a fundraising event: what are the legal issues?
In a cross-border context, the translation of your fundraising documents can be used :
- registration with a foreign regulatory authority (SEC, FCA, BaFin, etc.),
- as part of a banking license or visa application,
- in the event of a dispute brought before a foreign court,
- or simply to facilitate exchanges between international co-investors.
In all cases, the translated version may have legal value. It will potentially be analyzed by judges, arbitrators, tax authorities or auditing firms.
Language, legal and cultural requirements
Contrary to popular belief, fundraising documents are not just a matter of corporate law. They cross several specialties:
- tax law (tax deferral, capital gains),
- securities law (securities, issuance, approval),
- contract law (commitments of the parties, suspensive clauses),
- and technical financial vocabulary (valuation cap, liquidation preference, ratchet, etc.).
A common example: the French notion of "clause de sortie conjointe" can be translated differently according to local practice: "tag-along right", "co-sale right" or "joint exit clause", with distinct legal implications.
Only a specialized translator will be able to identify these nuances and choose the functional legal equivalent in the target language, according to the applicable law.
Case study: a European start-up confronts the IRS
A start-up based in France receives financing from an American investor via a Delaware-based holding company. The IRS (Internal Revenue Service) requires full documentation of the fund-raising, translated into English, to validate the tax package.
The shareholders' agreement includes complex liquidation preference and non-dilution clauses. A mistranslation could have led to the belief that the founders had been granted an excessive advantage, which would have triggered a tax requalification with penalties.
Thanks to a rigorous legal translation, the company was able to demonstrate the conformity of its set-up and avoid a costly procedure.
Why entrust translation to a legal expert?
Translating a fundraising event means entering into the legal and strategic intimacy of a company. This requires :
- precise knowledge of business law concepts in both legal systems,
- a command of international financial terminology,
- ability to work under pressure, with rigor and confidentiality.
At Legal 230, our translators don't just translate: they analyze, compare and reformulate, taking into account the applicable law and your business objectives.
Translating your fundraising: a strategic choice
Whether you're a lawyer, an in-house counsel or an executive, you know that successful fund-raising depends as much on financial strategy as on the quality of the legal documents.
Don't let a rough translation jeopardize months of negotiations.
Are you involved in a fund-raising operation involving foreign players?
Call on an expert team to guarantee the security and fluidity of your exchanges.
👉 Contact Legal 230 for a tailor-made legal translation to meet your international growth challenges.