SCHEDULES

SCHEDULE 16Venture capital schemes etc

Part 1Limit on number of employees of company in which investment is made

Enterprise investment scheme

2

1

Chapter 4 of Part 5 of ITA 2007 (the issuing company) is amended as follows.

2

In section 180 (overview of Chapter 4), after paragraph (e) insert—

ea

number of employees (see section 186A),

3

After section 186 insert—

186AThe number of employees requirement

1

If the issuing company is a single company, the full-time equivalent employee number for it must be less than 50 when the relevant shares are issued.

2

If the issuing company is a parent company, the sum of—

a

the full-time equivalent employee number for it, and

b

the full-time equivalent employee numbers for each of its qualifying subsidiaries,

must be less than 50 when the relevant shares are issued.

3

The full-time equivalent employee number for a company is calculated as follows—

Step 1

Find the number of full-time employees of the company.

Step 2

Add, for each employee of the company who is not a full-time employee, such fraction as is just and reasonable.

The result is the full-time equivalent employee number.

4

In this section references to an employee—

a

include a director, but

b

do not include—

i

an employee on maternity or paternity leave, or

ii

a student on vocational training.

4

The amendments made by this paragraph do not have effect in relation to—

a

shares issued before the day on which this Act is passed, or

b

shares issued to the managers of an approved fund which closed before that day.

5

For the purposes of sub-paragraph (4)(b)—

a

the managers of an approved fund” has the same meaning as in section 251 of ITA 2007, and

b

the reference to shares issued to the managers of an approved fund is to shares issued to those managers as nominee for an individual who has invested in the fund.