Investment Opportunities from AIM
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by: Mark Shaw
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AIM is the London Stock Exchange's international market for smaller growing companies. On AIM you will find a wide range of businesses ranging from young, venture capital-backed start-ups to well-established, mature organisations looking to expand.
Since its launch in 1995, over 2,500 companies have joined AIM − raising more than £34bn in the process, both through initial public offerings (IPOs) and further capital raisings. This capital has helped AIM-quoted companies of all kinds to fund their development and pursue their ambitions. Many companies have made the transition to the Exchange's Main Market following their success and positive experience on AIM.
Why AIM is unique?
When the London Stock Exchange created AIM, the objective was to offer smaller companies − from any country and any industry sector − the chance to raise capital on a market with a pragmatic and appropriate approach to regulation. With this in mind, AIM was designed to be a highly flexible public market offering many unique attributes both for companies and investors.
To join AIM, companies do not need a particular financial track record or trading history. There is also no minimum requirement in terms of size or number of shareholders. This more flexible approach reflects the fact that AIM was designed specifically for smaller growing companies, and has helped AIM to become the leading global growth market. With this in mind, AIM was designed to provide a balanced regulatory regime offering many unique attributes both for companies and investors.
Who is involved in AIM?
AIM has a large, diverse and committed community of stakeholders, made up of various market participants. Specialist advisers are crucial to the market’s success, and range from dedicated Nominated Advisers (Nomads) who play a central role in the life of an AIM company, through to lawyers, accountants and brokers. Other important participants and stakeholders include investors, public relations (PR) and investor relations (IR) agencies who help companies join the market and make the most of their AIM quotation, and market committees and publishers focused on AIM and its companies.
AIM has developed to meet the needs of smaller companies. A flexible approach to regulation and a streamlined admission process make AIM the ideal market for smaller growing companies seeking to develop their business in a supportive environment.
Enhanced accessibility
AIM is a flexible market that does not stipulate minimum requirements for:
* Company size
* Track record
* The number of shares in public hands
* Market capitalisation
Simple admission process
AIM's unique approach to company admission through the role of the Nomad ensures that the process is simple, relevant and timely. Nomads are specialists with a deep understanding of the needs and aspirations of companies looking to come to AIM, and are highly experienced in helping them every step of the way to their AIM quotation.
Appropriate regulation for smaller companies
AIM is renowned worldwide for having a regulatory framework and approach uniquely suited to smaller companies. The AIM Rules do not contain legal or technical jargon, and are designed to be as flexible and comprehensible as possible. The Exchange operates a consultative approach to any changes in the rules governing AIM, and always engages and consults with market participants before putting any modifications into effect.
There are various tax reliefs available to investors in AIM companies. These tax advantages are those which relate to investments in qualifying unquoted companies. Companies traded on AIM are regarded by the Inland Revenue as unquoted for this purpose.
The tax reliefs available include:
For individual investors:
* Capital Gain Tax (CGT)
- Business asset taper relief
- Gift relief
* The Enterprise Investment Scheme (EIS)
* Inheritance tax (IHT)
- Business property relief
* Relief for losses
* Venture Capital Trusts (VCTs)
For corporate Investors:
* Corporate venturing scheme (CVS)
About the Author
If you are looking to make an investment then visit the London Stock Exchange website for all the resources you will need to make the best investment decision.
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