Unapproved Share Option Schemes

Key facts: Unapproved share option schemes solicitors

  • Unapproved share option schemes enable employers to offer staff the option to purchase shares in their company in the future, at an agreed pre-set price, ideally benefitting from increased value at exit.
  • Unapproved share option schemes differ from approved share schemes in that there is no requirement for HMRC to provide approval for their use. They can be a good route if your company or employees don’t qualify for tax-advantaged (approved) schemes like Company Share Option Plans (CSOPs), and EMI options. If you do qualify for approved share schemes, there are also ways of combining approved and unapproved shares together.
  • There are several share incentive schemes available to employers. Our team of specialist share option scheme solicitors can outline the pros and cons of each.
  • Equity-based option schemes provide a useful way of incentivising and rewarding loyalty and hard work without immediately diluting shareholding.
  • Share options differ from share award schemes in that employees are not gifted partial ownership of the company. Hence no changes to the articles of association or shareholders’ agreement are required until the option is exercised.
  • Regardless of the scale of your business, our share scheme solicitors have the knowledge and experience to help you review and implement a share-based incentive scheme which fits your immediate and long-term financial and business objectives.

What we do: Unapproved share option scheme legal advice

Unapproved share options provide an effective way for employers to encourage and reward loyal and hardworking employees by offering equity in their company. Under this arrangement, employees have the option to purchase shares in the future at a price defined by the company.

Unapproved option schemes can be offered to members of staff who are not eligible for approved options schemes; including overseas staff, or consultants.

Our corporate share scheme solicitors regularly advise employers on all aspects of their share option requirements. We’ll outline the share schemes available, the advantages and disadvantages of each, the risks to your business, and any legal implications, before helping you design, structure and implement the right scheme for your business.

In addition to advice on unapproved option schemes, we also provide guidance in relation to approved tax-advantaged schemes such as:

For more information on how employee share schemes work, don’t forget to read our advice, What are employee share schemes and how do they work?

Who we help: Employers at all levels, from start-ups and SMEs to large corporates

We specialise in start-ups, high growth companies and SMEs but we also help many large businesses to set up and administer unapproved share option schemes.

Why choose Harper James? Our solicitors’ experience

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