Capital Markets: What Companies Should Check Before Financing

Capital markets financing does not end with the investor agreement. North Macedonia's Financial Instruments Act and the Act on Prospectuses and Transparency Obligations of Issuers of Securities require the company to review the entire structure: what it offers, to whom, what information it publishes and who will monitor the subsequent duties. Legal analysis should begin before selecting the instrument and before discussing price. The company can then align its business goal, corporate decisions and documentation before the investor finalises an offer.

Does the financing fall within the regulated capital market?

The answer depends on the instrument, the manner of offering, the circle of investors and the possibility of trading. A bank loan, a private capital contribution and a public offering of securities do not create the same duties. Even a document called an "investor loan" may include conversion into shares, an option or another component that requires separate legal classification.

The first task is to map the transaction without regulatory labels: who provides funds, what they receive in return, how the return is calculated, whether they obtain voting rights and how they can transfer their rights. Only then should the parties identify the rules governing that structure. This sequence also matters for foreign investors, whose documents often follow a model from another jurisdiction.

What should an issuer check before a public offering?

The issuer should determine whether the offering requires a prospectus, whether an exemption applies and which authority approves the required document. This review goes beyond completing a form. Information about the company, risks, finances and use of proceeds must be consistent and supported by documents.

The working checklist for an offering commonly includes:

• articles of association, a current registry extract and signing authority;
• resolutions of the shareholders' meeting and management and supervisory bodies;
• financial statements and explanations of material changes;
• ownership structure and rights of existing investors;
• agreements restricting new issues, borrowing or changes of control;
• a description of the use of proceeds and the risks investors should understand.

If the prospectus presents a project that still lacks a permit, land or an agreement with a key partner, the document should clearly describe that condition and risk. The marketing presentation must not offer broader rights than the formal documentation.

How should the agreement reflect regulatory duties?

The investor agreement should allocate responsibility for documents, approvals, notifications and cooperation with the competent institutions. The parties should address what happens if a required approval is refused or the documentation needs supplementation. They should also prevent either party from publishing transaction information without an agreed process.

Options, convertible instruments and assignments of future income require analysis of each element's legal nature. One clause may affect control of the company, transparency duties and the investor's exit. Price and interest form only part of the negotiation. Information rights, transfer restrictions and dispute resolution mechanisms often carry greater long-term significance.

How do private agreements and public financing differ?

Private agreements and public financing differ in the circle of participants and the volume of public information, but both require corporate authority and precise documents.

This comparison is a starting point for planning. A particular structure may contain elements of several categories.

Why does transparency continue after funding?

The issuer and its management bodies should decide in advance who will collect, verify and publish information after the transaction. Depending on the company and instrument status, this may include periodic reporting, ownership changes, significant business events and information affecting investor assessments.

The internal process should designate a responsible person, an approval path and a record of the data supplied. The finance team should coordinate with the legal team, while management bodies should know which decisions or personal transactions may trigger additional duties. In corporate groups, the same communication rules should cover related persons holding relevant information.

What does preventive legal analysis cover before a decision?

The analysis starts with the financing goal and ends with a written plan for documents, decisions and responsibilities. The legal review should connect corporate law, contractual terms and capital markets rules. The company can then identify the issues it must resolve before the offering, the terms open to negotiation and the duties that will continue after receiving funds.

More than 15 years of work on contracts and business decisions has shown that the problem often lies in the process rather than a single clause: one team prepares the document, another prepares financial projections and a third makes the decision. Legal analysis should join these parts into a verifiable whole and assign responsibility for each next step. For a foreign investor, the same analysis also compares expectations formed under home regulation with the rules applicable in North Macedonia.

Related service: Corporate Law

Source: Capital Market Supervisory Authority, regulations.

This text provides general legal information and does not constitute legal advice for a specific case. For advice tailored to your situation, please consult an attorney.