I have a husband and wife trading company. The authorised shares capital is 100 x £1 and these have all been issued - 50 to husband and 50 to wife. A family member is looking to invest some £200k into the business to assist in it's expansion and this must be in exchange for shares. H&W wish to retain control of the company. Could the company issue preference shares, mem and arts allowing, to cover this investment? If it were to increase its ordinary share capital H&W would lose control, they are not in a position to invest further funds at this time. Any thoughts would be appreciated.
Jan
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EIS
Enterprise Investment Scheme.
You could issue B shares under the Enterprise Investment Scheme. The company must apply for the scheme and receive approval from the Revenue, which means that your investors will get 20% tax relief up to a maximum of £400,000, but there is no limit for the investment. The maximum tax relief is £80,000. No capital gains tax if the shares are held for three years.
You would hold the shares you have as A shares and full control of the company.
The company must meet the requirements for the scheme.
Regards,
JCV