The Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS) may assist you attract investors and turn your company idea into a reality.
This strategy is intended to assist your firm in raising funds when it first begins trading. It does this by providing tax breaks to private investors who purchase shares in your firm.
This plan, like SEIS, assists your firm in raising cash by providing tax breaks to individual investors. It is intended to assist you in expanding your company.
Both schemes have restrictions that must be observed in order for your investors to collect and preserve the tax breaks associated with their shares.
Both schemes require that the shares issued fulfill the same standards. They must be paid up in full, in cash, at the time of issuance, and must be full risk ordinary shares.
are non-redeemable and provide you no special rights to your assets
This is true for both approaches. HM Revenue and Customs (HMRC) requires an explanation of how your company’s investment fits the criteria, which means:
The cash obtained by your firm must be used for growth and development. The investment should include the risk that the investor will lose more capital than they are likely to receive as a net return.
You may get a maximum of £150,000 via .
This limitation includes any additional de minimis state assistance received in the three years before and including the date of the investment, and also counts against any future investment restrictions under other schemes.
allows you to raise up to £5 million per year and a total of £12 million in your business’s lifespan, including funds collected via other schemes. Your firm must receive investment under the programme within 7 years of its first commercial sale.
Special regulations apply to knowledge-intensive businesses, which increase the time and investment limitations.
If you do not follow the regulations for at least three years after making the investment, tax breaks will be withheld or removed from your investors.
Before proceeding, you may check with HMRC to see whether your share issue is likely to qualify. We can assist you with this procedure. The risk-to-capital condition narrative’s language is critical, and we have a track record of getting it right.
After you’ve issued your shares, you’ll need to fill out a compliance statement. Again, we can assist you with this procedure.
Contact us at the Consulting WP office nearest to you or submit a business inquiry online.