Enterprise investment company

From Wikipedia, the free encyclopedia. Interested investors can purchase shares of the qualifying companies from them directly or through an EIS fund. This information provided on our website is based on our understanding of current taxation law and HM Revenue and Customs practice, which may change in the future.

How the scheme works

When completing a detailed EV calculation, you subtract out associate investments as they are considered like cash — something that would be liquidated to pay off debt or liquidated in the case of a sale. You would subtract the value of these enterprise investment company at market value as if you were selling the investment right now to pay off debts. Our users explain below:. From what I was explained, investments in associates is almost like a market stock investment. Deducting it out of EV will be done to account for the likely sale of this investment once the firm is acquired, as it is not really part of the operational enterprise.

We use cookies to collect information about how you use GOV. We use this information to make the website work as well as possible and improve government services. You can change your cookie settings at any time. EIS is designed so that your company can raise money to help grow your business. It does this by offering tax reliefs to individual investors who buy new shares in your company. This also includes amounts received from other venture capital schemes. Your company must receive investment under a venture capital scheme within 7 years of its first commercial sale.

We use cookies to collect information about how you use GOV. We use this information to make the website work as well enterprise investment company possible and improve government services. You can change your cookie settings at any time. EIS is designed so that your company can raise money to help grow your business. It does this by offering tax reliefs to individual investors who buy new shares in your company. This also includes amounts received from other venture capital schemes.

Your company must receive investment under a venture capital scheme within 7 years of its first commercial sale. You must follow the scheme rules so that your investors can claim and keep EIS tax reliefs relating to their shares.

Tax reliefs will be withheld or withdrawn from your investors if you do not follow the rules for at least 3 years after the investment is. There are different rules for knowledge-intensive companies that carry out a significant amount of research, development or innovation, and either:. The rules for EIS approved funds will be changing on 6 April to take account of the:. Read the draft guidelines to find out more about the amendment to the requirements for an EIS approved fund. The money raised by the new share issue must be used for a qualifying business activity, which is either:.

Your company must carry out a qualifying trade. This means:. The subsidiary can be set up to complete a project or series of projects before closing, as long as it supports the growth and development of your company. The investment should carry a risk that the investor will lose more capital than they are likely to gain as a net return. HMRC will not consider the maximum return an investor could get if your company is successful, because this cannot be guaranteed.

You will not meet the risk to capital condition if there are risk reducing arrangements in place that result in an investor:. Your company should have a way to accept payment before shares are issued. Your shares for EIS investments must be full risk ordinary shares which:. The shares you issue can have limited preferential rights to dividends. However, the rights to receive dividends cannot be allowed to accumulate or allow the dividend to be varied.

Your investors will only be able to claim tax relief if you meet the conditions for EIS. You can ask HMRC if your share issue is likely to qualify before you go ahead, this is called advance assurance.

You must submit it within 2 years of this date, or within 2 years of the end of the tax year in which the shares were issued whichever is later. The letter will include a unique investment reference number. You must include this on the compliance certificates you give to investors. Investors need the compliance certificate and reference number to be able to claim tax relief. You must follow the scheme rules for at least 3 years after the investment is made — otherwise tax relief will be withdrawn from your investors.

You must tell HMRC if you no longer meet the conditions within 60 days. If you disagree, you can ask HMRC to review the decision, or appeal against it. To help us improve GOV. It will take only 2 minutes to fill in.

Skip to main content. Tell us whether you accept cookies We use cookies to collect information about how you use GOV. Accept all cookies. Set cookie preferences. Home Business tax Investment schemes. Published 1 January Last updated 11 July — see all updates. Contents How the scheme works What money raised can be used for Companies that can use the scheme When you issue shares Before raising your money How to apply.

How the scheme works EIS is designed so that your company can raise money to help grow your business. Your shares for EIS investments must be full risk ordinary shares which: are not redeemable carry no special rights to your assets The shares you issue can have limited preferential rights to dividends. Related content Use the Seed Enterprise Investment Scheme to raise money for your company Tax relief for investors using venture capital schemes Venture Capital Schemes Manual Use a venture capital scheme to raise money for your knowledge intensive company Venture Capital Schemes Manual.

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Shares issued without payment or with enterprise investment company payment are ineligible for EIS tax relief. The rules for qualifying are complicated; for example, the following are some of the qualifications that must be met: [3]. Languages Add links. Retrieved 15 July Investors must hold the shares for at least three years and shares purchased must be ordinary shares that do not preferentially protect the investor from the risks of investing in the company. Registered No. The EIS allows an exception which applies to angel investors. Partners, directors or employees of a company are also excluded. Kin Capital and Enterprise Investment Partners announce the merger of their two businesses. The Herald. Retrieved 17 January What Are Toxic Assets? By using this site, you agree to the Terms of Use and Privacy Policy.