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It is not simply sufficient to meet the requirement relating to the purpose of the share issue (see E3.119). The money raised must actually be employed for this purpose within a time limit¹.

However the use of an insignificant part of the money for some other purpose is disregarded².

The monies raised may be employed for the purposes of a qualifying business activity if the company has earmarked them in the relevant period for some specific purpose and is keeping them in reserve for that purpose³.

The meaning of 'employed' in circumstances where the issuing company kept the funds on call to apply as working capital as and when required was discussed at length in the Upper Tribunal in Skye Inns Ltd⁴. At first, the company, which operated two public houses, had intended to apply the funds in purchasing a third, but the purchase fell through, and during the period concerned, the company failed to find a replacement. Instead, it kept the funds in an