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Investing into a company

Hi,

I'm about to make an investment in a small business & wanted to check if it's better to do so as an individual or through one of my companies; here is my thoughts;

As an individual

1. As I am a director in the company in which I wish to invest I am able to invest via. the EIS scheme, is this possible if i invest via a company also?

2. Is my liability unlimited thus better to invest via my company

3. Less paperwork if I invest as an individual

As a company

1. Capitalise the investment, written off via. an annual review

2. Potential capital allowances available

3. Allowances for any direct costs related to the investment

4. Limited liability to the assets held under the company

Can anyone suggest anything points I am missing or offer any further insight?

Thanks

 

Replies

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Your query creates a few puzzles. Also you give no information about the investee company, your own company, source of funds, the nature and size of the investment and potential exit routes - all of which might influence the advice you seek.

You talk about investing in a company.

If that is the case how are you personally exposed if the investment is made personally?

How can a corporate investment in shares generate capital allowances?

Possibly you are talking about a joint venture whereby you are investing directly in a business, not a company.

If it is a share investment you are talking about, personal investment is likely to be better. You mention scope for EIS. If not there may be scope for entrepreneur's relief.

On the other hand corporate investment may be preferred if the funds are currently inside a company or if there is scope for substantial shareholding exemption.

 

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