Five Questions To Ask When Selecting An EIS


All across the globe, you will come across countless small companies that are operating in different fields. These companies carry on with their operations but sometimes these are unable to raise their capital and may remain at the same level. In other words, such companies are unable to remain as successful as other big companies around. For such companies, EIS or Enterprise Investment Scheme proves to be a boon. This scheme helps the smaller companies or those at risk to keep operating. It is done by offering the facility of federal tax relief to the investors of such companies. Thus the shares of such companies become appealing and hence attract the investors. Being an investor, if you also wish to choose an EIS for investment purposes, you may need to enquire about some important things. Here are the most important questions that you must ask before making the final decision:-

Are You Eligible For The EIS?

One of the foremost and major questions that must be asked while choosing any of the EIS shares is your eligibility for the same. You must ask the concerned officials, authorities or their representatives if you are actually eligible to invest in the given EIS scheme. For this, you may need to provide details of your business and other information needed to apply for the EIS. After all, you may actually invest in the given scheme only if you are eligible for the same.

EIS and start making investments

What Is The Overall Fee?

You may need to pay some amount of fee in order to apply for EIS and start making investments. It is better to ask for the overall fee or charges involved so as to avoid any issues later on. Ask them about any additional or hidden charges.

What Are The Risks Involved?

Since you are making an investment in the EIS scheme in order to raise your business capital, therefore, safety assurance is of utmost importance. Thus you must enquire about the risks involved if any. By being aware of the probable risks, you may take a decision accordingly.

What Can You Expect In Terms Of Profits?

Obviously, you may look forward to some profit returns from the given EIS investment. Therefore it is all the more important and necessary to ask about the expected profits from the relevant EIS scheme.

What Is The Tax Criterion For Eis Dividends?

Lastly, you must also know about the tax reliefs and other information regarding tax for the EIS dividends. Also, ask if these are the same for individuals and companies that intend to make investments in EIS shares.

By asking all such questions, you may definitely decide on and pick the right and the best EIS scheme. Thus you may benefit greatly in the long run.