EIS Flashcards
EIS qualifying criteria?
Companies must be unquoted at the time the shares are issued.
It cannot be listed on a recognised exchange.
IT can subsequently be listed as long as it was not planned when the shares were issued.
The company must not control another company without that company being a qualifying subsidiary.
Must not be controlled by another company.
Cannot have it gross assets exceeding £15M before any shares issue and £16M after.
Must have fewer than 250 employees.
Can be either the company carrying the qualifying trade or the parent company of a trading group.
LIMIT ON MONEY RAISED
Companies are not allowed to raise more than £5M in total in any 12 months from the venture capital schemes.
HOW AND WHEN THE MONEY RAISED BY THE SHARE ISSUE MUST BE USED
The money raised can be used either for the purpose of an existing qualifying trade or for the purpose of preparing such a trade.
The money raised by the share issue must also be employed for the purpose of trade or R&D within 2 years of the shares being issued.
TRADING ACTIVITIES
Most trade qualify but some do not such as:
- dealing in land, commodities or futures in shares, securities or other financial instruments.
- dealing in goods, other than in an ordinary trade of retail or wholesale distribution.
- Financial activities.
- leasing or letting assets.
- providing legal or accountancy services
- Property development
- farming
- holding, managing, occupying woodlands
- shipbuilding
- Coal production
- steel production
- operating and managing hostels, nursing homes, residential care homes
- generating or exporting electricity
- providing services to a person who’s activities predominantly do not qualify
