Beacon4Life CIC is limited by shares, we have two classes of shares, Class A Ordinary with voting and dividend rights and Class B Preference with dividend only rights. We are launching a private share offer to our supporters and are looking to raise circa £80,000, depending on the value of the Euro! We need 62 investors to buy 1275 £1 shares each to reach our goal. Does anyone have any recent experience of submitting a private share offer document and business plan to HMRC for pre-approval on Social Investment Tax Relief? Anything we should know or avoid?
Feel free to give me a call, ive gone through a few now and as you know im keen to help CICs succeed in raising shares so happy to discuss.
There are no bogey men in there is the simple thing to say, it is exactly as for the process of EIS or SEIS really. The devil is in the detail though, here's the link to the best resource :
Please note: one of the most common reasons for investments failing to qualify for relief under EIS is that shares are issued to investors without the company having received payment for them. This sometimes happens when a new company is registered at Companies’ House and shares are issued to members as part of the registration process, but the company then takes some time to set up a bank account and the shares are not paid for until that has happened. We would advise companies and investors to ensure that any shares, on which it is intended EIS relief will be claimed, are not issued during the company registration process but are issued only at a later date when the company is able to receive payment for them.
Shares must be full-risk ordinary shares, and may not be redeemable or carry preferential rights to the company’s assets in the event of a winding up. Shares may carry limited preferential rights to dividends, but may not include rights where either:
Thanks for this, really helpful, will give you a call. We are hopefully going to be one of BSC's First to 30 programme for SITR which will bring some specialist tax advice too.
Our class B Preference shares are redeemable as we anticipated that shareholders may wish to sell them back to us after the qualifying period for SITR has expired. Looks like we will need to change them?
Correct, basically any buy back agreement (formal or non formal) negates relief. A few banana skins to avoid but all very doable my old friend.
Good google research recommendation for wider readers, particularly types of investor section 48-52 :
Also, to get general standards of disclosure etc read the FCA COBS rules (Financial Conduct Authority Conduct of Business Rules) which shows what is required (disclosure,information accuracy, record keeping etc)
for those who want a general overview and not the full detail: