Income Tax Act 2007 section 257CB

The purpose of the issue requirement

Section 257CB requires that shares issued under the Seed Enterprise Investment Scheme must be issued to raise money for a qualifying business activity.

• Shares (excluding bonus shares) must be issued to raise money for a qualifying business activity
• The qualifying business activity may be carried on by the issuing company or by a qualifying 90% subsidiary of that company
• The business activity may already be under way or may be one that is intended to be carried on in the future
• The definition of "qualifying business activity" is found in section 257HG of the Act