Ask the Collective

What share structure and preference rights are allowed under EIS eligibility rules?

EIS (and SEIS) eligibility has strict rules around share structure—any preferential shares will invalidate your relief entitlement. **Key requirements:** - Avoid any preferential share classes entirely. Members emphasise this is non-negotiable: "anyone wanting that relief cannot have shares that are preferential in anyway." - Standard ordinary shares with proportional voting rights are required. Most sophisticated investors will not accept non-voting B shares anyway. - In practice, early-stage investors typically hold under 1% of equity, so proportional voting rights won't meaningfully dilute founder control. **Bottom line:** If you're targeting EIS investment, keep your cap table simple with a single class of ordinary shares. Don't introduce preference rights, liquidation preferences, or non-voting structures—these are common in later funding rounds but incompatible with EIS relief.