Information rights

Information rights are the contractual provisions in an SHA that obligate a company to provide investors with regular, structured updates on its financial and operational performance. They exist because shareholders — unlike directors — have no automatic right under the Companies Act 2013 to access management accounts, budgets, or operational metrics between statutory filings.

Typical information rights packages include monthly management accounts (P&L, balance sheet, cash position), quarterly business updates (KPIs, key hiring, pipeline), an annual audited financial statement, a board-approved annual budget, and access to the company's books and records for inspection on reasonable notice. Some SHAs also require a cap table update whenever shares are issued or transferred.

Information rights serve as the investor's early warning system. Deteriorating gross margins, rising burn, or customer concentration problems show up in management accounts before they become crisis events. Investors who receive timely information can offer help — introductions, talent, follow-on capital — while there is still time to course-correct.

For founders, information rights represent an administrative overhead. A monthly reporting pack takes time to prepare, especially at early stages when the team is thin. The practical approach is to negotiate a materiality threshold so that reporting obligations kick in only above a minimum investment size (e.g., investors holding less than 2% are not entitled to monthly reporting), and to build a template reporting pack so that preparing updates becomes a routine, not a burden. Information rights are typically tied to minimum shareholding — if an investor is diluted below a threshold, the obligation can fall away.