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To access legal support from just £140 per hour arrange your no-obligation initial consultation to discuss your business requirements.
Enterprise Management Incentive (EMI) share options are designed to allow companies to provide share options to employees with great tax advantages. Share incentives are popular with high-growth and high-risk companies, like tech start-ups, as a way to attract, reward, and retain hard working staff right through to an exit (such as the company being sold).
We can handle everything from checking whether a company and its employees qualify for EMI and valuing the company’s shares (and agreeing the value with HMRC), to planning and drafting share scheme rules and award agreements which meet the EMI legislative requirements and checking they work with the company’s articles of association and shareholders’ agreements, as well as advising on HMRC compliance, notifying option awards to HMRC and advising on any Companies House compliance, all for as little as £140 per hour.
Our expert employee share scheme and equity incentives lawyers can help you through every step of setting up an EMI scheme. We will:
Establish that your company qualifies for an EMI share option scheme (and if not, find an alternative approach to providing tax efficient incentives, e.g. growth shares)
Apply for advance clearance from HMRC that your company qualifies to grant EMI options
Design and draft the EMI scheme rules and share option agreements
Agree on a valuation of the shares underlying EMI options with HMRC
Review any pre-existing shareholders’ agreements and articles of association to check if any amendments are necessary, or if particular consents are required for introducing the scheme
Prepare board minutes and shareholder written resolutions
Make filings at Companies House
Report the grant of the EMI option to HMRC
Advise on HMRC compliance, including notification of EMI option awards to HMRC and annual on-line reporting
A share option is a right to acquire shares in the future at a price that is fixed at the time of grant, so if the value of the shares underlying an employee share option increases over time employees may receive significant value. Ordinarily employee share options are subject to employment income taxes at the time they are exercised, which can result in large tax charges at the time of an exit. However, provided certain conditions are met, a company can set up an EMI scheme to grant share options worth up to £250k to each employee/director (and £3m in total) – which provides relief from income tax and national insurance charges on the exercise of the options. The company should also benefit from a corporation tax deduction when the EMI options are exercised equal to the value in the options at the date of exercise.
The sale of the shares acquired on option exercise should then be treated as a capital gain and should be eligible for business asset disposal relief if the option has been held for at least two years. This should significantly reduce the taxes payable by employees at the time of an exit and provide a much more attractive employee share scheme.
We’re a modern law firm with a difference. Our innovative remote operating model means that you can access expert City-grade legal advice from partner-level solicitors at a fraction of the cost of traditional law firms. Our solicitors have all been recruited from top 100 UK law firms or large international businesses.
Find out more about our employee share scheme and equity incentive lawyers here:
Our three transparent pricing packages are designed to give you the widest possible access to high-quality legal advice, whatever the size and nature of your business:
Straightforward access to senior solicitors at a competitive rate.
An affordable solution for businesses needing one-off legal support. Receive ‘City’ partner-level expertise at a fraction of ‘City’ prices.
Have legal peace of mind for £209 per month with additional support from £140 per hour.
A monthly subscription legal support package specifically designed for start-ups and smaller businesses.
Providing you with priority access to a dedicated panel of highly experienced solicitors.
Fully account managed quarterly subscription service for businesses with more complex legal needs.
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Our commercial lawyers are based in or close to major cities across the UK, providing expert legal advice to clients both locally and nationally.
We mainly work remotely, so we can work with you wherever you are. But we can arrange face-to-face meeting at our offices or a location of your choosing.