Can I raise funds for my business through the Enterprise Investment Scheme?
My Mate says… ‘I can raise funds for my business through the Enterprise Investment scheme (EIS)’
EIS is one of the four venture capital schemes, it is designed so that your company can raise money to help grow your business. You must receive investment under a venture capital scheme within 7 years of your first commercial sale, so it is a great way for early stage businesses to obtain cash investments in return for issuing shares to the investors.
To entice investors, there are tax reliefs available for the individual investors who buy new shares in your company (if your company and they fulfil the criteria).
Under EIS you can raise up to £5,000,000 each year and a maximum of £12,000,000 in your company’s lifetime.
The money raised by the new share issue must be used for a qualifying business activity.
Not all businesses qualify for EIS, your business trading activity must fall within the list of qualifying trades. There are other qualifying criteria that your business must meet in order qualify for EIS such as permanent place of business in the UK, not listed on the stock exchange, less than 250 full time staff members and not be controlled by any other company except for qualifying subsidiaries.
Before raising funds through EIS, it is strongly recommended that you obtain advance assurance from HMRC that you qualify. As part of our EIS services, we will discuss your eligibility and submit an advance assurance application on your behalf.
We will assist you at every stage of your EIS from advance assurance to issuing the EIS certificates to your investors.