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Going up!

03 August 2006 / Kevin Nicholson
Issue: 4069 / Categories: Comment & Analysis , Capital Gains , Companies , Income Tax , Investments
KEVIN NICHOLSON looks at the tax implications when the growth of the company has reached a stage where additional capital is required.

LET US SAY that your client company Widgets Ltd has now been trading for ten years and has a successful track record. Having perhaps utilised and grown out of some of the tax incentives available for start-ups and then having benefited from for example enterprise management incentive (EMI) schemes to recruit retain and incentivise key management to drive the business to the next level the owners have determined that the next stage of the company's development will require additional funding. So what should the next move be?

The broad options available to take the business forward (in no particular order) are:

  • Seek to raise additional capital via a flotation.
  • Sell out to a larger organisation which can take the business forward.
  • Find a partner to invest in the business and allow it to...

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