What are employee share schemes?
They are used to incentivise employees through the company structure. Employee share schemes aim to encourage employees, particularly key employees, to remain with the business and are an added incentive to achieve defined, long-term business targets and financial outcomes with the aim of benefitting both the business, its owners and the individual employees.
Share schemes will often include conditions which must be satisfied before an option to acquire shares may be exercised. These could be linked to performance (either of the company or the individual) or the occurrence of a certain event, with the most common one being a sale of the company.
Often share schemes are approved by HMRC in which case the company and/or the option holder may obtain certain tax reliefs, however others are not, and it is vital the employers and employees are properly advised on the legal and tax consequences of rewarding employees with shares in their company. Our corporate law team can help.
Who are they for?
Share schemes are especially useful for businesses in their early stages and owners planning for an exit in the future.
What are the benefits?
As employee share schemes are methods to encourage key employees to remain with the business, it allows owners to plan for the future with a solid and established senior staff base. The retention of key employees is often the aim and the outcome of the successful implementation of an employee share scheme.
What types of schemes can you advise on?
We are involved regularly in advising companies on tax-related share schemes approved by HMRC (including EMI, EBT, JSOP and EOT schemes), unapproved share schemes and other ways of rewarding staff, such as growth shares.
What about existing shareholders?
Existing shareholders should be aware of and will often need advice on the implications that could affect them as a shareholder. The business will also need sound advice on the consequences of extending share ownership to employees.
How does our corporate law team work?
We take time to learn about your business’ goals and how it operates so we can structure and draft any such scheme accordingly. We can help entrepreneurs with start-ups and also growing and established businesses.
What are employee share schemes?
They are used to incentivise employees through the company structure. Employee share schemes aim to encourage employees, particularly key employees, to remain with the business and are an added incentive to achieve defined, long-term business targets and financial outcomes with the aim of benefitting both the business, its owners and the individual employees.
Share schemes will often include conditions which must be satisfied before an option to acquire shares may be exercised. These could be linked to performance (either of the company or the individual) or the occurrence of a certain event, with the most common one being a sale of the company.
Often share schemes are approved by HMRC in which case the company and/or the option holder may obtain certain tax reliefs, however others are not, and it is vital the employers and employees are properly advised on the legal and tax consequences of rewarding employees with shares in their company. Our corporate law team can help.
Who are they for?
Share schemes are especially useful for businesses in their early stages and owners planning for an exit in the future.
What are the benefits?
As employee share schemes are methods to encourage key employees to remain with the business, it allows owners to plan for the future with a solid and established senior staff base. The retention of key employees is often the aim and the outcome of the successful implementation of an employee share scheme.
What types of schemes can you advise on?
We are involved regularly in advising companies on tax-related share schemes approved by HMRC (including EMI, EBT, JSOP and EOT schemes), unapproved share schemes and other ways of rewarding staff, such as growth shares.
What about existing shareholders?
Existing shareholders should be aware of and will often need advice on the implications that could affect them as a shareholder. The business will also need sound advice on the consequences of extending share ownership to employees.
How does our corporate law team work?
We take time to learn about your business’ goals and how it operates so we can structure and draft any such scheme accordingly. We can help entrepreneurs with start-ups and also growing and established businesses.
