Structure your ASA so it stays SEIS/EIS‑compliant
Navigating Advance Subscription Agreements (ASAs): A Founder's Guide to SEIS/EIS Compliance that passes HMRC tests, issues qualifying ordinary shares, and converts smoothly at your next round.
For UK founders embarking on their first fundraise, the path to securing investment can feel complex, especially when navigating tax-efficient schemes like SEIS and EIS. A common tool in this journey is the Advance Subscription Agreement (ASA). This guide demystifies ASAs, ensuring your agreement not only passes HMRC tests but also smoothly converts into qualifying ordinary shares at your next funding round.
An ASA is a cash‑for‑future‑shares agreement. It is not a loan. In the UK, founders use ASAs so investors can claim SEIS or EIS tax relief.
- SEIS is the Seed Enterprise Investment Scheme.
- EIS is the Enterprise Investment Scheme.
- A SAFE is a US‑equivalent ASA: Simple agreement for future equity.
HMRC expects UK ASAs to be simple and to meet specific conditions if you want SEIS/EIS relief. See HMRC’s ASA guidance for EIS and SEIS at gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm12025 and gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm33025.
In 2024–25, HMRC received 3,090 EIS advance assurance applications and approved 76% of them by March 2025. Why it matters: apply before entering into the ASA and keep terms plain so you can issue the shares on time and let investors claim relief. Source: HMRC 2025 statistics