Small Companies Need Capital?
Advisory Services News - Issue 25
Good day!
Welcome to this update on ESS BIZTOOLS ADVISORY SERVICES NEWS.
SMALL COMPANIES NEED CAPITAL?
To assist small innovative companies in raising funds for their projects, the Australian Government introduced the “Early-Stage Innovation Company Capital Raising Process” seven years ago.
A unique aspect of this process is the introduction of an “incentive” for investors who invest in a company that meets the “status requirements” to be classified as an “Early-Stage Innovation Company”.
Investors participating in the “status process” receive a taxation credit calculated at 20% of their investment in the company subject to the following limits:
- Sophisticated Investors $200,000
- Retail Investors $10,000
If investors involved in the “status process” hold the shares for more than 12 months but less than 10 years, they are exempt from paying Capital Gains Tax when the shares are sold.
This incentive creates curiosity for some investors and offers small companies a valuable opportunity to raise capital, especially in times of high interest rates and inflation.
The applicant company must satisfy a series of tests to achieve this classification.
We will discuss these issues in detail during the ESS BIZTOOLS Complimentary Webinar Wednesday 3 July, 2024 at 12 noon AEST.
If you would like to register for the webinar, Click Here.
During the webinar, we will explore the ESS BIZTOOLS Product Package that Accountants, Bookkeepers, and Advisors can use to guide companies through the process required to obtain the Early-Stage Innovation Company classification and prepare the necessary financial and corporate documentation for potential investors.
This is a unique service opportunity for your firm, as many Accountants are unaware of this significant benefit for small companies. We look forward to presenting to you at the webinar.
