The process for a company to get approved to issue EIS shares involves a fair degree of work. However, the process itself is relatively straightforward once the company meets the necessary qualifying conditions.
There are a number of conditions
that a company must meet in order to be confident of EIS qualifying status. This includes ensuring that the money raised is used for a qualifying business activity. The money raised must be spent within 2 years of the investment or the date the business started trading. The money must be used to grow or develop the business and cannot be used to buy all or part of another business.
Under the EIS
scheme, a company can raise up to £5 million each year, and a maximum of £12 million in the company’s lifetime. This includes amounts received from other venture capital schemes. The company must also receive the investment within 7 years of making their first commercial sale.
As part of the Autumn 2017 Budget, there was an introduction of different rules for knowledge-intensive companies
that carry out a significant amount of research, development, and innovation. These rules allow up to £20 million (rather than £12 million) to be raised in the company’s lifetime and increases the 7 year limit for the first commercial sale to 10 years.
If you are looking to raise money using the EIS, we can help. We are very experienced in ensuring that the process is handled effectively and that the right structures are in place. This is to ensure the scheme in question is compliant with the legislation and HMRC’s rules, thus helping your company to raise investment and offering investors a valuable investment opportunity.
Get in touch with us via the contact form or call 020 3728 2848