This is a thorny subject that comes up time and time again:
How much of the share capital can I or my investors own under SEIS / EIS?
In this seventh episode of the Get Funded! podcast we cover the (dreaded) “substantial interest” test that basically says that you can’t hold more than 30% of the issued share capital and qualify for SEIS / EIS.
I say “dreaded” because it is not just you or your investor that you need to consider but also any “associates” too. “Associates” include spouses plus parents, children, grand-parents etc (basically blood relations up and down). Brothers and sisters are not counted as “associates”.
Many startup companies get tripped up by this rule so watch out for it!
This episode was brought to you by ip tax solutions – specialists in R&D tax credits
In this episode of the Get Funded! podcast we cover:
Getting your share capital right!
Not every type of share is eligible under SEIS / EIS and given the attractive tax benefits offered to investors, this is little surprise. SEIS /EIS investors cannot receive shares that have preferential rights. They must be – what we like to call –
“Full fat, full risk ordinary shares”
We also cover a couple of pointers to watch out for if you are raising money alongside VCs to ensure that the SEIS / EIS investors don’t lose out and how to avoid losing the relief by accident in the future….
This podcast is brought to you by ip tax solutions | the innovation tax specialists
So essential, in fact, that without it, you could mess up the SEIS relief for your investors before you’ve even really got started!
We also cover the maximum amount that you can raise under SEIS being £150,000 and the importance of getting the order right if raising cash under EIS too i.e. SEIS then EIS and not the other way around.
There are changes afoot around the interaction of these reliefs and the “70%” rule but this merits a separate episode – coming soon….! (Subscribe below ;) )
“Get ready to slice the pie!”
This show is all about the need to issue shares in return for a cash investment if it is to be eligible for SEIS or EIS under current rules.
We also cover what doesn’t qualify e.g. loans, and some tips around types of shares and nominal values of shares to help you get the SEIS share capital structure right from the outset.
Please subscribe and leave us a rating on iTunes – this will help this podcast get found by more entrepreneurs and help the UK get ahead in raising funding for exciting new startups!
- why and how SEIS is becoming so popular?
- why many business angels and seasoned investors will expect you to have considered SEIS?
- an outline of the tax benefits that SEIS provides for investors
- why you might be at a disadvantage pitching for investment without SEIS?
Leave us any comments or questions in the comments section.
It is with great pleasure that I introduce Andrew Thorp as our guest on this week’s Business N2K podcast. Andrew is a business speaker and trainer focusing primarily on effective communication skills within business. Andrew recently launched SpeakEasy within the North West and it is proving hugely popular amongst the local business community. SpeakEasy is … Read more#003 Speakeasy – Effective Business Communication with Andrew Thorp
I’m delighted to kick off our podcast series with a fascinating chat with Ian Sanders of The Ian Sanders Company on his latest book Juggle! Rethink Work, Reclaim your Life Ian Sanders is an entrepreneur, ideas guy, marketing bloke, business potentialiser, unplan evangelist, specialist in creative industries and author! You can either listen to the … Read moreShow #001 – Juggle! ReThink Work, Reclaim your Life