EIS shares are the investments made by the companies to help their businesses grow to great extents. The enterprise investment scheme was launched by the government in 1994 to help small firms and start-ups raise money.
By investing in EIS shares, businessmen and entrepreneurs can receive tax relief.
Delving Deeper Into The EIS Shares
Provide Access To Capital
Businesses and investors can reap the benefits of investing in EIS shares. It provides the entrepreneurs with access to equity capital to provide funds for developing the business.
Are A Long-Term Finance Option
These shares are a tax-free investment that provides businesses with some money. Raising finance in the form of equity makes the balance sheet look good. Also, one can obtain financial assistance from other sources such as banks. Corporations come across professional people who can provide some tips on how to raise the business and get worldwide recognition.
Do Not Require Capital Gains Tax
The investors do not have to pay the capital gains tax for making the investments. The fact that the businesses are exempted from paying the tax makes these schemes worthwhile.
Help Get More Returns
Investors can receive more returns from the shares. They get the same rate of return per pound that they invested earlier. Apart from this, the entrepreneurs hold these investments for three years to bring them more interest and long-term profits.
Free Of IHT
The EIS shares are exempted from the inheritance tax. The companies do not have to pay any tax if they have held the investment for two years.
Pre-Requisites To Apply For Enterprise Investment Schemes
Must Be In The Business
The company should be running for seven years and have around 250 employees. Also, it must fall into the category of HRMC excluding trades such as banking, industry, money-lending and legal services.
Have Gross Assets
In addition to this, the company can have current, tangible and intangible assets of less than 15 million pounds.
Should Be An Established Company In The UK
The company might have a fixed office in the UK. There could be a native agent who must act on the behalf of the company and exercise control.
To sum it up, EIS shares are a great way to grow the business and receive worldwide recognition. It helps the entrepreneurs receive numerous monetary benefits and they are exempted from paying all the taxes. To invest in the EIS, a company could have some gross assets, a permanent UK office and a native agent who looks into the business practices and spearheads all the activities. The EIS shares are long-term finance options that provide businessmen with money.
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