Section 257LDA | The existing investments requirement ^F1F2

(1)If at the time immediately before the investment is made the investor holds any shares in or debentures of—^F1F2

(a)the social enterprise, or^F1F2

(b)a company which at that time is a qualifying subsidiary of the social enterprise,^F1F2

those shares or debentures must be risk finance investments or (in the case of shares) permitted subscriber shares.

(2)A share or debenture is a “risk finance investment” for the purposes of this section if—^F1F2

(a)it is a share that was issued to the investor, or a debenture of which the investor is the holder in return for advancing an amount, and^F1F2

(b)at any time, a compliance statement under section 205, 257ED or 257PB is provided in respect of it or of shares or investments including it.^F1F2

(3)Subscriber shares are “permitted subscriber shares” for the purposes of this section if—^F1F2

(a)they were issued to the investor and have been continuously held by the investor since they were issued, or^F1F2

(b)they were acquired by the investor at a time when the company which issued them—^F1F2

(i)had issued no shares other than subscriber shares, and^F1F2

(ii)had not begun to carry on or make preparations for carrying on any trade or business.^F1F2

(4)In this section “debenture” is to be read in accordance with section 257L(6).^F1F2