Page 26 - Kavka Proposal Web

Part Four
Taxation

(b) Conditions applicable to Shareholders Qualifying for (ii) neither the Shareholder nor any Associate of his/
EIS Relief hers may be an employee, partner, employee of a
partner or paid director of the Company (subject to
A holder of EIS Qualifying Shares must not be
connected with the Company during the period which the paragraph below) or its subsidiaries. An unpaid
begins two years before EIS Qualifying Shares in the director is not disqualified if he is reimbursed travel
Company are issued to him/her and ends three years or subsistence expense which would otherwise be
afterwards (or three years after the commencement allowable for taxation; and
of the Company’s trade, if later) if he/she is to obtain (iii) a Shareholder may become a paid director of the
and retain Income Tax relief. A Shareholder will not Company following the issue to him/her of EIS
be connected with the Company if he/she passes the Qualifying Shares, provided that at the time he/she
following tests: subscribes for the shares he/she was not, and had
not previously been, connected with the Company
(i) neither the Shareholder nor he/she and his/her nor with the trade carried on by the Company. Any
Associates together may control the Company, remuneration paid to a shareholder director in
or directly or indirectly, possess or be entitled to these circumstances must be reasonable for the
acquire, more than 30 per cent of the ordinary services rendered to the Company.
share capital: issued share capital or voting powers
in the Company, or rights carrying entitlement Share Subscriptions
to more than 30 per cent of the assets available The Company must not raise more than £5 million
for distribution on a winding-up or in any other from EIS or Venture Capital Trust sources in any
circumstances. Control means the power of a period of twelve months, and all of the money raised
person to secure by means of shareholding, voting from the share issue must be employed for the
power, the articles of association or any other purposes of the Qualifying Trade within two years.
document (whether relating to the Company or
another company) that the affairs of the Company
are conducted in accordance with his wishes;

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