You’ve already begun to establish your business, bringing together a valued team of employees, and now you want to take the next step by incentivising your team further using the significant tax and strategic benefits of an Employee Share Option Scheme (ESOS). But now you’re wondering - should you work with a dedicated solicitor or use an online share scheme platform?
You’ve probably come across online platforms in your research. They simplify setting up and managing schemes with automation and standardised templates and are often competitively priced. However, they don’t provide tailored legal advice, which can be essential for structuring schemes correctly and managing complex situations. If you’re using an online platform, we recommend having dedicated legal support alongside it.
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. So, why use a solicitor alongside an employee share scheme platform?
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You’ll properly understand the documentation and so will your employees
We frequently advise clients who come to us after using solely online platforms to create documentation for their ESOS. As the platforms are template based, they cannot always provide a simple set of documents to suit company needs. Instead, the platforms generate multiple versions of documents which are opaque and difficult for employees to understand.
A solicitor will be able to help you understand these documents, making sure the rewards and benefits for your employees are maximised.
You’ll get correct documentation tailored to your business needs
We see inconsistencies in template documents which will create operational problems down the line and on a value creation event. Errors in Enterprise Management Incentive (EMI) schemes are a particular headache on a transaction.
This is a particular problem for EMI options because it is difficult to make post grant changes to the option terms without affecting the overall tax efficiency.
A solicitor will make sure your documentation is correctly drafted and tailored to suit your individual business needs, factoring in any future events your business might go through. This can save you time and money overall, which can be better spent on growing your business.
You’ll get tailored legal support to suit your situation and goals
Every business is different, and online share scheme platforms don’t offer legal advice that factors this in.
Online platforms are rarely tailored to individual requirements. One of our clients hadn’t been told about the implications of an employee leaving after they’d joined the ESOS and become a shareholder.
At this point, specific protections need to be built into the governing documents, to protect the future success of the business. Working after the event to create those protections, once the employee has become a shareholder, is complex and time consuming. As with most legal issues, these are best dealt with by a solicitor before the problem comes up.
Added to which key documents, such as shareholder authorities, investor consents, and permissions for a new round of options or equity, can often be overlooked by the platform.
What should be my first step to set up and manage an employee share scheme?
Online platforms certainly have a valuable role in the market, offering visually appealing dashboards and user-friendly interfaces that make managing share schemes more accessible. However, relying solely on these platforms without the support of expert legal advice can lead to potential issues down the line. While platforms can streamline the administrative side, they lack the tailored legal guidance necessary for structuring schemes correctly and navigating more complex scenarios. Without this expert input, you may encounter legal pitfalls that could affect the long-term success of your share scheme.
We combine legal support with the convenience of an easy-to-use online platform, helping you streamline administration while ensuring your scheme is structured correctly from the start.
To learn more about how this can work for you, including pricing, key benefits, and how we can support your business, visit our Share Plan Management page. If you’re ready to get started or have any questions, get in touch via our short contact form, and a member of our team will be happy to help.
