EMI Share Options: Explore an EMI Share Option for Your Employees

Service overview: EMI share options and legal advice

  • EMI share option schemes are a way of offering your employees a legal right to later purchase shares with very favourable tax treatment. The value an employee can realise will increase in proportion to any growth in the value of the shares after the option is granted, so this is an ideal way to align employees’ interests with the company’s/shareholders’.
  • Shares 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).
  • Both the company and the employee must meet certain conditions to qualify for the scheme, or the tax benefits might not be realised. EMI schemes are HMRC tax advantaged share option schemes, as they need to meet specific requirements set out in tax legislation to enjoy the tax advantages.
  • We can handle everything from checking whether your company and employees qualify and valuing your shares (and agreeing the value with HMRC), to planning and drafting share scheme rules and award agreements, as well as registering the plans with, and notifying options to, HMRC.
  • EMI share options can be combined with a number of other types of non-tax advantaged share insentives like unapproved share options or growth shares/hurdle shares.
  • Check out our FAQs on EMI schemes for lots of useful information on creating a scheme and how it can benefit your company and employees.

What we do: EMI share option schemes and legal advice

Enterprise Management Incentive (EMI) share options are designed to allow you to provide share options to your employees, with great tax advantages.

A share option gives an employee the right to acquire a number of shares in your company at a future date, but at a price that is agreed on and fixed now. They’re intended to help you recruit and retain valued employees and reward them for investing their time and skills in helping to grow your business.

An option scheme can be a valuable investment for your employees. If the value of the shares increases over time after the grant of the options, employees may make significant gains.

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 – without paying income tax or national insurance on the exercise of the options. An EMI option is subject to an overall maximum limit of £3M worth of shares under options at any time.

On the sale of shares acquired as a result of an exercise of an EMI option, any increase in the value of the shares will be treated as a capital gain and capital gains tax may be payable on the gain (subject to the availability of various exemptions and reliefs).

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.

You can find out much more regarding option shares by simply visiting on our EMI FAQs page, which also contains a useful glossary of EMI terms.

Leaver provisions are a key element of how share options operate. Watch our EMI option corporate solicitor, Jas Bhogal, explaining how they can affect shareholders:

How Can Harper James Help Your Company Create EMI Shares for Your Employees?

Our expert employee incentive lawyers can help you through every step of setting up your options and running an employee share scheme such as an EMI share option plan for your employees. We will:

  • Establish that your company qualifies for a share option scheme (and if not, find an alternative approach to qualifying or creating an EMI option)
  • 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 EMI shares with HMRC
  • Review any pre-existing shareholders’ agreements and articles of association agreed upon to check if any amendments are necessary, or if particular consents are required for the scheme
  • Prepare board minutes and shareholder written resolutions
  • Make filings at Companies House
  • Report the grant of the EMI option to HMRC
  • Advise you how to run the share scheme, help you with annual HMRC reporting, etc. if you wish

Who we help

Watch our CEO Toby Harper explaining in this short video why an EMI share scheme can be a great option for high-growth businesses:

*prices correct at time of filming

Why choose our EMI solicitors? Our experience

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 incentives lawyers here:

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