Corporate Finance &

Capital Market

Recognising the need for intelligent, innovative solutions in today's fast-paced business environment, we are highly regarded for our expertise in capital markets. We provide tailored guidance through every complexity, offering bespoke solutions across a wide spectrum of corporate finance transactions to ensure our clients' success.

Venture Capital Schemes

Employment Investment Scheme (EIS), Venture Capital Trust (VCT), and Seed Enterprise Investment Scheme (SEIS) are UK government-backed venture capital schemes designed to encourage investment into small, higher-risk trading companies by offering generous tax reliefs to investors. They are crucial tools for fundraising for many start-ups and SMEs in the UK. EIS and SEIS involve direct investment into the company's shares. VCTs involve investing in a fund (the VCT) which then invests in a portfolio of companies.

For eligible companies, setting up to receive investments under the EIS or SEIS offers a compelling range of benefits, primarily revolving around enhanced fundraising capabilities and investor attractiveness. Key benefits include:

  • Attracting Investment: The generous tax reliefs (50% income tax relief for SEIS, 30% for EIS, CGT exemption, CGT deferral/reinvestment, loss relief) make an investment into a relatively high-risk, early-stage company far more appealing to individual investors.
  • Access to Capital for Growth: EIS and SEIS provide vital equity capital for development, market entry, and scaling. Unlike loans or bank borrowings, equity capital doesn't require regular repayments or accrue interest, easing the financial pressure on a growing business and allowing funds to be reinvested into operations.
  • Professional Network and Mentorship: Investors seeking EIS/SEIS opportunities often include experienced entrepreneurs, business leaders, and sector specialists. Beyond just capital, they can bring valuable mentorship, industry connections, and strategic advice to the company.

Employee Ownership Trusts

Employee Ownership Trust (EOT) allows a company's shares to be held in a trust for the benefit of all employees. This means the employees, collectively, become the ultimate owners of the business without having to buy shares individually.

EOT is formed when a trust is established and becomes the legal owner of a controlling stake (more than 50%) in the company. The existing owner(s) sell their shares (or at least a majority stake) to this newly formed EOT. The purchase by the EOT is typically funded by the vendor's loan or external finances. The EOT holds the shares for the employees' collective benefit.

EOTs offer significant advantages for both the selling owner(s) and the employees/company:

  • CGT: A full exemption from Capital Gains Tax (CGT) on the sale of a controlling interest (more than 50%) to an EOT. This can represent a substantial tax saving compared to other exit routes.
  • Succession: EOT can provide a clear and stable succession route without needing to find an external buyer, sell to a competitor, or execute a management buyout (MBO) which can be complex and financially demanding for the management team.
  • Tax-free bonus: Employees can receive annual tax-free cash bonuses per tax year, provided certain conditions are met. This is a powerful incentive and reward.

How We Can Help

We provide comprehensive advisory services for both Employee Ownership Trusts (EOTs) and the Enterprise Investment Scheme (EIS) or Seed Enterprise Investment Scheme (SEIS). For EOTs, we guide businesses through the entire transition process, from initial feasibility assessment and structuring the transaction, seeking approval from HMRC to navigating legal complexities and securing the CGT exemption for selling shareholders. Concurrently, for companies seeking investment, we offer expert assistance in structuring EIS and SEIS compliant fundraising rounds, advising on eligibility criteria, preparing necessary documentation, and connecting businesses with our extensive network of investors eager for these tax-efficient opportunities. Our goal is to ensure both your business and your investors maximise the significant benefits these schemes offer, whether you're transitioning ownership or securing vital growth capital.

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