Client company obtained investment from outside investors under EIS/SEIS, totalling £200K. Over 3 years later and the client has asked whether the company can borrow funds (loan) to buy back the shares from the investors. I have advised that this won't work, as a buyback has to be from distributable reserves.
Client cannot afford the purchase personally.
Shares have paid dividends over the past 3 years, albeit fairly low amounts.
I don't think this can be done? Am I missing something? Can an associated company buy the shares?
Company makes a small profit.