Granting equity is one of the quickest ways to attract, retain and motivate top talent, but the mechanics of an employee share option scheme can trip up even the most seasoned leadership team. Get it right and you unlock tax savings, clean cap tables and an engaged workforce; get it wrong and you risk HMRC penalties, disgruntled leavers and deal-blocking paperwork.
This FAQ guide is for founders, finance directors and HR leaders who are weighing up whether to build their scheme entirely on an online platform, through a solicitor, or by combining the two. By the end you’ll know exactly which approach matches your budget, growth plans and risk appetite, so you can issue options with confidence and focus on scaling the business, not wrestling with templates.
As a founder or finance lead keen to motivate key staff and impress investors, you need a share scheme that’s watertight yet easy to run. See how our employee share scheme solicitors blend strategic legal advice with platform automation to save you time and minimise risk.
Contents:
1. What routes are open to me?
| Route | Best for | Typical cost (UK, ex-VAT) | Core deliverables |
| Platform-only | Cash-conscious start-ups with basic EMI options | £1,500 – £3,000 p.a. subscription | Valuations, template rules, cap table, grant tracking, ERS return data file and, employee portal |
| Solicitor-only | Businesses wanting tailored legal advice, compliance and peace of mind | £2,500 – £7,500 fixed or hourly | Bespoke scheme rules, tax & Companies Act compliance, board/shareholder consents, HMRC liaison |
| Hybrid (lawyer + platform) | Businesses aiming to benefit from precise legal drafting together with the streamlined management of an online platform | Legal fee (often lower) + platform subscription | Lawyer designs scheme; platform handles grants, vesting and HMRC filings |
2. How does an online share scheme platform work?
Modern equity-management tools share five core building blocks:
| What the software gives you | How it helps |
| Real-time cap table & dilution modeller | Instant view of ownership, vesting and funding-round scenarios |
| Scheme builder & template library | Guided wizards or document upload for EMI, CSOP, unapproved or global plans; templates pre-checked by lawyers |
| Valuation workflow | EMI valuations via in-house teams or partners |
| HMRC compliance toolkit | Generates grant notices, annual ERS return files, and deadline reminders |
| Self-service portals | Employees and investors can e-sign, view vesting schedules and download documents 24/7 |
Platform-only pros
- Lower upfront spend.
- Deadline reminders cut the risk of missing the 6 July ERS return.
Platform-only watch-outs
| Risk | Why it happens |
| Template blind-spots | Off-the-shelf rules may omit leaver, performance or growth-share tweaks your articles require. Templates might not be appropriate for your business strategy. They also often generate generic corporate authorisations (board minutes and resolutions) which may not reflect your company’s specific circumstances. If these documents aren’t accurate, there’s a risk that shares could be invalidly issued, potentially causing issues later on. |
| Compliance hand-off | Unless you (or your adviser) upload the ERS files, HMRC never sees them. |
| Platforms are not SRA regulated | Online platforms aren’t regulated by the Solicitors Regulation Authority (SRA), which means there’s no legal oversight or professional duty of care. If something goes wrong, you may have limited recourse compared to working with a regulated legal adviser, such as a solicitor. |
Example: One client of ours relied on a platform that produced three conflicting sets of option rules. Investors found the inconsistency and the funding round stalled until the documents were redrafted.
3. What extra value does a solicitor bring?
- Bespoke design – choosing between EMI, CSOP, unapproved options or growth shares and tailoring vesting, leaver and drag-along clauses to your articles.
- Tax precision – aligning tax valuations and tax qualifying conditions to access tax relief.
- Due-diligence ready – a single, consistent set of documents reduces investor queries and exit delays.
- Contingency planning – advice on overseas moves, restructures, disputes and exit-only options.
Drawbacks
- Higher professional fees than a DIY platform.
- Manual share registers and certificates unless you add software.
4. What can go wrong - and how have businesses tripped up?
Choosing a platform-only approach can work for simple setups, but it may lead to problems later, particularly during funding rounds or a sale. EMI schemes are especially sensitive, and even small errors can impact tax treatment. It's important to ensure your scheme is set up correctly from the start and aligns with your business’s future plans.
| Risk | Real-world example | Consequence |
| Late HMRC notification | Company relied on platform reminders but missed a Bank-Holiday deadline | EMI options lost tax relief; PAYE & NIC became due |
| Conflicting documents | Platform generated multiple rule sets for sub-plans | Investor due diligence flagged inconsistency; funding round delayed |
| Leaver loophole | No 'bad leaver' clause in template; employee kept full stake after resigning | Share buy-back required at premium price |
| Incomplete approvals | Platform didn’t prompt for investor consent to increase option pool | Shareholder dispute and extra legal costs to ratify grants |
5. Is a hybrid approach really better?
Increasingly, yes. Some platforms partner with law firms or let lawyers work inside the system you already use.
- Bespoke design – your solicitor builds bespoke rules inside the platform or uploads them.
- Click-once grants – the platform issues options, tracks vesting and stores signed documents.
- Ongoing compliance – the platform prepares HMRC returns; the solicitor is on call for unusual events.
Because templates and signing are automated, legal time is spent on strategy, not admin.
6. Key questions to ask before deciding
- How simple is your cap table and future funding plan?
- Do you need performance-based vesting or overseas coverage?
- Who will own HMRC deadlines and board approvals?
- What is your tolerance for fixing mistakes later versus paying for bespoke advice now?
Bottom line
- Platform only works for straightforward, early-stage schemes, provided someone in-house follows each template to the letter and meets every HMRC deadline.
- Solicitor only is the safest route for anything unusual or transaction-ready, but you’ll still need a process for ongoing admin.
- Hybrid typically delivers the best of both: legal brains upfront, software muscle thereafter, and often for less than running everything through a law firm alone.
At Harper James, we combine the efficiency of an online platform with cost-effective legal support, ensuring that your scheme is both easy to manage and legally robust. With 24/7 platform access and real-time visibility of shareholdings, you get the best of both worlds.
