The company-level qualifying conditions

The four high-leverage tests are about how you present the trade, the raise, the share terms, and the risk. The five tests gathered here are about the company itself.

Where the company is, how old it is, how many people work there, who controls it, and what it has raised before are tests of fact. For most applicants they are confirmed rather than argued, and several are caught by the eligibility checker on Seisly's front page before an application is even started. They still have to be addressed in the application, and a failure on any one is enough on its own, but they are unlikely to be the reason an application is refused.

Test five · polish test. Whether the company is unquoted, and whether it has a permanent establishment in the United Kingdom.

SEIS and EIS are available to unquoted companies – companies whose shares are not listed on a recognised stock exchange. AIM is treated as unquoted for this purpose, which is why AIM-listed companies can still raise under EIS. The company must also have a permanent establishment in the UK, broadly meaning a fixed place of business here from which the trade is wholly or partly carried on.

For most applicants this is a paper check. The application asks where the company is incorporated and where its place of business is. HMRC corroborates against Companies House and the registered office address. The condition is almost always satisfied in practice for UK-incorporated companies operating from UK premises.

The test becomes substantive when the company is incorporated outside the UK (most commonly in the US, as a Delaware C-corp founded by a UK founder) or when a UK company's operations are predominantly overseas with only a registered office in the UK. The Seisly eligibility checker filters these cases before the application is even started, but founders sometimes attempt to proceed anyway, and HMRC will refuse on this ground.

What good looks like: a UK-incorporated company, with a registered office and operational presence in the UK, and a clear statement on the application that the company's trade is carried on wholly or substantially in the UK. If you have overseas operations, name them and explain how the UK establishment carries on a substantial part of the trade.

Test six · polish test. Whether the company is within the trading-age window for the scheme being claimed: three years for SEIS, seven years for EIS, longer for KICs.

SEIS is intended to fund companies at the very earliest stage of trading. EIS extends to companies in their growth phase. The age clock runs from first commercial sale, not from incorporation. A company can be incorporated for years without having traded; the clock only starts when the company first generates revenue from its qualifying trade.

HMRC asks for the date of first commercial sale, then cross-checks against the financial accounts and the business plan. Where there is no commercial sale yet, the company is pre-trading and the age limit has not started running. Founders sometimes assume the limit runs from incorporation; the calculation is generally more generous than that.

What good looks like: a clear answer to "what was your first commercial sale date" – either a specific date with revenue evidence, or "no commercial sale yet, the company is pre-trading". Where the company is approaching the relevant limit, the application should explain the position directly.

Test seven · polish test. Whether the company is within the size thresholds: £350,000 gross assets and 25 full-time equivalents for SEIS; £15m gross assets and 250 FTEs for EIS.

The schemes are designed for small companies. The SEIS thresholds are deliberately low to keep the relief targeted at the smallest, earliest-stage businesses. EIS thresholds extend significantly higher to capture growth-stage companies, but a company over the EIS limits cannot use the scheme at all.

For group companies (where the applicant has subsidiaries), the thresholds apply to the group as a whole. A SEIS applicant with a 40 per cent stake in a joint venture must take a proportionate share of that JV's assets and employees into the calculation.

HMRC reads the latest accounts (or the most recent management accounts where statutory accounts are not yet filed) to verify gross assets immediately before the share issue. They read the application's FTE answer against headcount-relevant data points in the business plan: payroll narrative, hiring plans, team slide. Most applicants pass this test without comment. The cases that fail are typically companies that have grown faster than the founder expected since the last accounts, or companies whose group structure has not been properly aggregated.

Test eight · polish test. Whether the company is, and has always been, independent – not controlled by another company, with no qualifying subsidiaries other than those permitted by the legislation.

SEIS and EIS are for independent companies. The schemes exclude any company that is or has been controlled by another company since incorporation. The control test is broad: control means more than 50 per cent of the share capital, the voting rights, or the practical ability to direct the company's affairs. A qualifying subsidiary is allowed (a UK trading subsidiary the applicant owns more than 50 per cent of), but the structure must be clean and the subsidiary itself must carry on a qualifying trade.

HMRC reads the share register and ownership history from incorporation. Any period during which the company was controlled by another company – even briefly, even by mistake, even before the current founders bought it – defeats the test permanently. There is no cure for past control on the existing entity. If this applies, the standard path is to incorporate a clean new company, transfer the trade and any non-share-encumbered assets across at arm's length, and structure the new entity correctly from day one. The work is not small. It is also the only path that opens SEIS or EIS for the future.

The test is also forward-looking: there must be no arrangement at the time of investment under which control will be transferred to another company. This catches cases where a SaaS startup has signed a heads-of-terms to be acquired but is raising bridge financing in the meantime.

Test nine · polish test. Whether the company is within the lifetime and annual investment limits for the schemes, and whether prior scheme use opens or closes future options.

SEIS is capped at a lifetime total of £250,000 raised under the scheme. EIS is capped at £5m per twelve-month period, with a £12m lifetime cap (£20m for KICs). Together with VCT (Venture Capital Trust) investment, these limits aggregate. A company that has previously taken VCT investment counts that against its EIS headroom.

The schemes also have an ordering rule: SEIS must be used before EIS for any company raising under both schemes, and the SEIS round must close (with shares issued) before EIS shares are issued. Companies that try to issue EIS shares first and then SEIS often find the SEIS portion defeated.

HMRC tracks all SEIS, EIS, and VCT investment by company across the full history of the company's life. The application asks for prior scheme funding totals; HMRC verifies against their own records and against any compliance statements previously filed.