SEIS and EIS certificates (EIS3 and SEIS3)
What is SEIS and EIS? SEIS (Seed Enterprise Investment Scheme) and EIS (Enterprise Investment Scheme) are tax-relief schemes set up by HMRC to encourage and support individual investment in early stage, higher risk companies. If you invest in a company that qualifies for SEIS or EIS, you can claim relief against your personal tax liability (income and capital gains) – both at the investment stage and at exit, or if the investment fails and you loose money. Basically, if you invest a certain amount of money, you get some of that money ‘back’ in tax relief – which makes the idea of investing in riskier businesses more attractive.
In order to benefit from SEIS or EIS relief, the company you are investing in has to obtain confirmation from HMRC that it qualifies under the scheme(s) and then the company needs to provide you with a certificate (SEIS3 or EIS3) that you can use when completing your tax return.
The SEIS and EIS schemes are complex and you should take professional advice around whether your company qualifies or if you should invest in a qualifying business. Kudocs is here to make executing the whole process much, much easier.
Can I use Kudocs to apply to HRMC for SEIS or EIS approval (or pre-approval)? Not currently, but we are working on it. The application to HMRC for approval (form SEIS1 or EIS1) needs to be done directly with HMRC. Once they have approved the scheme, they will send you an SEIS2 or EIS2 with Unique Investment Reference.
You then need to provide this, together with certain other information to your investors (SEIS3 or EIS3). This is where Kudocs can help!
How do I generate EIS/SEIS certificates for shareholders? The EIS/SEIS certificate tool is available at the end of the share issue process. Once you’ve issued the shares, just click on the button and complete the process. It takes a couple of minutes, max– let Kudocs do all the hard work – including building the individual certificates, getting them signed by a director (very easy for them – they only have to sign once), and distributing to the relevant investors.
It will save you hours, and your investors will love it.
Can I just generate an EIS or SEIS certificate – why do I need to add the share issue as well? You can generate EIS or SEIS certificates whenever you want (including getting hold of certificates you have already generated and regenerate new ones). However in order to generate an EIS or SEIS certificate you need to have the corresponding share issued recorded in Kudocs first. This is because EIS/SEIS is based on a share issue: a large part of the information on the EIS or SEIS certifcate comes from the share issue, so you cannot have the EIS/SEIS without the share issue.
Will Kudocs generate EIS for investors behind a corporate nominee – even if there are hundreds of them? Yes and yes – all you need to do is upload the details of the investors (using our very simple import tool) and Kudocs will do the rest. No size limit! We’ve had customers use it with 800+ investors.
Can I use Kudocs to obtain director signature on the certificates? Yes. Just select this option in the process and Kudocs will email the director asking them to sign electronically. It will take them – and you – a matter of seconds to do.
Can I use Kudocs to create SEIS/ EIS certificates, but get signatures separately (e.g. wet signature)? Yes. Just select this option in the process and Kudocs will generate the specific certificates for each investor, and you can then download them to be signed off-system and distribute them as you see fit.
Will Kudocs distribute share certificates to the shareholders? Yes. Just select this option in the process and Kudocs will email the completed certificates to each investor. The certificates will also be saved as a pdf in the process itself and in the stakeholder’s page for future reference.
Can the EIS/SEIS generation process be cancelled? The process can be cancelled anytime until the certificates are signed.
Where can I find out more?