Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Mutual trading

09 June 2009
Issue: 4209 / Categories: Forum & Feedback
A company limited by guarantee facilitates the investment in enterprise investment schemes by its members who are charged fees to cover the legal costs, etc. associated with the making of such investments

I have a client a company limited by guarantee (BACO) that is utilised by business angels as a means of making enterprise investment scheme (EIS) investments.

BACO does not invest itself but does raise funds by charging subscription fees and deal fees to members and deal fees to invested companies.

This income is used to meet legal accountancy and administration fees arising from the investment processes. There is no profit motive and it is really the vehicle under which the investment club administers their investments.

Not all members of the investment clubs are formal members of BACO i.e. they do not act as guarantors. There are two tiers of members: those that are guarantors and those that are not.

The former pay slightly less than the latter in terms of subscriptions and deal fees to recognise the additional time and personal costs arising from...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon