Posted: 07 February 2024 ![Eligibility tests for innovative companies](https://www.essbiztools.com/images/zoo/blogs/bas-updates/BASU2024/basp080224.jpg) # Eligibility tests for innovative companies #### Business Advisory Services Update A company aspiring to have **‘Early-Stage Innovation Company Status’** is required to pass one of two subsequent tests: Gateway test, or Principles test To qualify under the **Gateway Test**, the company has to aggregate 100 points by answering a series of questions. These questions relate to: - R&D expenditure undertaken by the company as a percentage of the company’s total expenditure. - Received an ‘Accelerating Commercialisation Grant’? - Completed or is undertaking an ‘Accelerator Program’? - At least $50,000 has been paid for equity interests that are shares in the company by persons who were not associates of the company? - Owns rights relating to a patent, standard patent, plant breeders right? - Owns an ‘innovation patent’? If the aggregate of points is 100 or more, the company is deemed to have ‘self-assessed’ under the Gateway Test. Full documentation supporting the answers given to these questions must be maintained for future audit. If the company does not achieve a 100 point score, it can then complete the **Principles Test**. The Principles Test has five (5) questions which the company is required to submit supporting documentation for examination by the ATO. If the ATO is satisfied that the company has supplied appropriate answers to the questions, they will issue a certificate indicating that the company has achieved the status of an **‘Early-Stage Innovation Company’**. The five questions are: 1. Is the company genuinely focused on developing for commercialisation one or more new, or significantly improved products, processes, services, marketing or organisational methods? 2. Does this business have a high growth potential? 3. Can the company demonstrate that it has the potential to be able to successfully scale the business? 4. Does the company have the potential to be able to address a broader than local market? 5. Does the business have the potential to be able to have a competitive advantage? **ESS BIZTOOLS** has developed the **‘Early Stage Innovation Company Product Package’** to assist Accountants/Bookkeepers to offer these services to SMEs. To find out more, contact us on 1800 232 088 or email [](https://www.essbiztools.com/javascript:/*%20This%20email%20address%20is%20being%20protected%20from%20spambots.*/)[](https://www.essbiztools.com/javascript:/*%20This%20email%20address%20is%20being%20protected%20from%20spambots.*/). #### ESS BIZTOOLS Blogs ### Recent Posts... 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