Examples of the work we have recently performed in this area are given as follows:
- We assisted an AIM-listed company in the business of providing flexible electricity generation. The company was looking to create special purpose entities to build and operate individual generators, which were to be funded by external investors. We structured the business to ensure that the investors would be able to benefit from the EIS. We also successfully resolved a particular complication arising from the nature of the business, which might otherwise have delayed the timing of when EIS tax reliefs would be available to the investors.
- An individual client had developed a new type of cryptographic software and was looking to raise finance to extend and market his product. We assisted him in transferring his intellectual property into a new company for use as a fundraising vehicle, also ensuring the new investors would be able to benefit from the EIS. The company raised almost £4 million from external investors. A shareholders’ agreement was negotiated, under which the investors were seeking numerous minority shareholder protections. We advised on which of the minority protections would be compatible with EIS requirements, ensuring that the investors were able to retain the benefits of the scheme. We also undertook completion of all EIS compliance and filing requirements on behalf of the company, from the initial application through to issuing the final certificates to all the individual investors.
- A company that had developed a mobile phone application had successfully identified a potential investor, who was prepared to provide funds on the condition that he would obtain EIS relief. As the company initially did not have an office in the UK it was necessary to advise the company on how it might create a UK establishment, without which the company would not qualify for EIS. We also advised on the personal tax implications for the founder shareholder, who was a director, of having investors pay a significant premium for the company shares.
- A client was looking to take over part of an existing recycling business and incorporate it into a new venture. We were asked to ensure that the acquisition would not compromise the company’s EIS status. We therefore advised on the structure of the arrangements so that the acquisition would not disqualify the relief and advised on how the EIS funds would need to be utilised in the activities of the new venture as a whole.
- We were approached by a group of individuals looking to start an interior design business. As part of our discussions we advised them about how they could benefit from SEIS reliefs by effectively reducing the amount of capital each person was risking in this new venture. Due to the nature of the business, it was also necessary to provide guidance about the activities that were being planned to ensure that none of them would jeopardise compliance with SEIS requirements.