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Sarah Hyde

31st March, 2017


HMRC approved Stonelin Communications Limited application for EIS registration

The Enterprise Investment Scheme aims to help unquoted companies attract equity investment by offering investors a range of tax incentives. AIM quoted and PLUS quoted companies qualify as well. The EIS was introduced in 1994 to encourage individuals to invest in unquoted trading companies by offering tax reliefs. The EIS allows a company (a 'qualifying company') that meets certain conditions to raise funds by issuing full-risk ordinary shares to the individual investors previously unconnected with the company. It is particularly suitable where the investment project is risky, as the maximum a higher-rate taxpayer can lose is 48% of their investment. It also allows individuals to be paid directors in the companies in which they invest and yet retain the tax reliefs, provided certain conditions are met.

EIS QUALIFYING COMPANIES MUST:

  • Be unquoted – although AIM and PLUS Quoted companies do qualify

  • Be independent

  • Have gross assets of less than £15m before the EIS share issue, and £16m afterwards

  • Have less than 250 employees

HMRC reference: MBC/MSB/S0970/14760 13270/SCEC