Apart from leading and renowned names in the business world at any place, there are many small and unrecognized companies and start-ups that are struggling hard to be in the race. They make their best efforts to ensure their survival in this highly competitive business world. The major challenge faced by almost all such companies is the lack of funds or investments that they need in order to carry on with their operations in the relevant field. On the other hand, the bigger and established businesses wish to save huge amounts of money that are otherwise paid by them in the form of different types of taxes. Keeping in mind all these facts, the EIS scheme has been introduced which is meant to benefit the bigger as well as the smaller companies. Here is the ultimate guide to this advantageous investment scheme.
Key Focus On Small Businesses And Start-Ups
The enterprise investment scheme is chiefly meant for small businesses and start-ups that require funds or investments for their smoother business operations and activities. The scheme is meant to supply the requisite funds to such companies or firms that are in urgent need of the same.
Beneficial For Investors As Well As Investees
Of course, the smaller companies or the investees get benefited from the EIS shares. At the same time, it is beneficial for the investors as well. It is because the smaller businesses get the funds they need while the investors get reliefs in the form of capital gains tax, income tax, federal tax and so on. Owing to some reason, the bigger businesses or companies feel interested in making investments in such firms that have great growth potential in the future. They get shares in the companies being invested in and tax reliefs.
Eligibility Is A Must
In order to get benefited from the EIS scheme, the investors, as well as the investees, need to be eligible for the same. As an instance, the investors must have a 30% share in the company being invested in. Likewise, the investee company also needs to fulfil certain requirements in order to get the investments.
Minimizes Losses For The Investors
As far as losses incurred by the companies being invested in are concerned, the enterprise investment scheme minimizes the losses for the investors. It is because the losses are covered up by the tax reliefs they get.
This is all about the EIS which has emerged as a boon for such companies or firms that are struggling to survive in the business world. By getting the requisite financial aid, the companies that are invested in by the investors are able to carry on with their operations while offering numerous benefits to the investors.