VCM20510 - Enterprise investment scheme (EIS): General: Company invested in - independence rule

ICTA/S293 (8); ITA/S185 (2)

The company is not a qualifying company if it is under the control of another company or of another company and any person or persons connected with that company (see VCM20520 for the meaning of “control”, and VCM15120 for the meaning of “connected”).

It is also specifically provided that the company must not be a 51% subsidiary of another company - that is, owned as to more than 50% of its ordinary share capital (see ITA/S989 for the definition).

There must not be any arrangements by virtue of which these rules could be breached, either currently or at any future date. But this rule does not apply where the arrangements relate to transactions to which VCM20550 applies. “Arrangements” is defined as including any scheme, agreement or understanding, whether or not legally enforceable.