Reward top talent and stay ahead of the competition with a growth share plan that offers real incentives
We’re experts in employee incentive arrangements and will support you in organising and setting up the most appropriate growth share plans (whether that’s hurdle shares or flowering shares) for your specific setup. Our corporate team will:
- Advise you as to which share schemes are best for your situation. We can recommend the most suitable options based on your location, business type, stage of growth, and objectives.
- Help you design and implement your scheme with regards to capital and income entitlement, voting rights, and leaver provisions.
- Help you set and define the threshold, value your company, and decide the price your employees will pay for the growth shares.
- Amend your articles of association to allow for new classes of shares.
- Amend any shareholders’ agreements as needed and make sure your existing shareholders are on board with the scheme including any impacts of dilution on other shareholders.
- Show you how to combine growth shares with other types of share schemes, both HMRC tax-advantaged and non-tax advantaged arrangements, including EMI schemes, hurdle shares, flowering shares and phantom shares.
- Explain to you any impacts under the SEIS or EIS schemes.
- Set up your scheme for you.
- Enter into a section 431 election on your behalf.
What our clients say
We pride ourselves on delivering an excellent service for clients, but don’t just take our word for it.
I can’t sing our solicitor’s praises enough: fast, efficient, sensible and supportive. A quick and fair resolution to all queries that we have worked on together and would thoroughly recommend her to any of my contacts.
Easy to work with, quick responses, quick feedback if changes needed, gets things done. We consider the arrangement very worthwhile for Storelectric and would recommend to others.
Align growth share plans with your strategic goals
Growth shares are a class of equity shares that you can give your key employees as an incentive. They’re normally provided by high growth companies and allow employees to benefit from the growth in the value of the business above a set threshold when the business is sold.
Working with you to understand your business needs, we will help you answer the following questions when putting a growth share plan in place:
- How does a growth share scheme work?
- Will my existing shareholders see the value of their shareholding diluted by the issuance of growth shares?
- How does the threshold work? How will I calculate it?
- Can I tie the threshold to business or performance goals?
- How much will my employees pay for the shares?
- What happens when an employee leaves?
- Are there any tax advantages and if so, how do they work?
- Can I set a growth share scheme up alongside another employee incentive arrangement?
How growth shares can benefit your business
Reward your employees in a tax-efficient way without lots of ongoing admin
While growth shares are tax-efficient, they are not ‘tax-advantaged’ so they don’t need clearance from HMRC, and you don’t have to tell the Revenue about them, saving you time and money. Also, tax-advantaged schemes must meet specific legal requirements set out in the tax legislation in order to receive tax relief, such as EMI share schemes. Growth shares schemes are simpler to operate.
Preserve your cash-flow
Offering employees equity is a very cash-efficient way to reward them. Unlike bonuses, you don’t need to raise funds or set aside valuable cash-flow to offer them a significant benefit.
Gain a competitive edge
Companies with employee incentive arrangements are proven to be more successful overall than businesses that don’t. Get ahead of the competition (and attract and reward your talent) by setting up a scheme that will incentivise them well.
Protect investors and existing shareholders as well as your own stake
When you offer growth shares, your employees will become immediate shareholders. It’s vitally important that you, your existing shareholders and investors are protected from the dilution of your current share value, so that growth shareholders only benefit in an uplift in share price after they acquire their shares or after a threshold value has been reached. We can show you how to do this, liaise with your shareholders, allay any concerns they may have and amend all your existing agreements with them to reflect the new scheme.
Save money on tax
If your employees will be paying full market for their shares, they’ll pay no tax. They’ll only pay capital gains tax on any increase in value, and this is paid at a rate that’s less than income tax.
Who we help: Ambitious, high-growth businesses
We support a wide range of high-growth, UK-based clients who require support with employee incentive arrangements to retain top talent as they scale their efforts. For many founders that we work with a key area of risk for them is maintaining the balance of retaining talent while ensuring other founders and investors are satisfied with the arrangement, and simultaneously manging cashflow. It’s undoubtedly a juggling act. That’s why many founders seek our help. We can offer the support necessary for you to introduce a growth share plan that suits your business goals and take care of any other concerns that come along the way.
Why choose Harper James Solicitors?
We can assist you with strategic analysis of your business and help you understand all the employee share scheme options open to you. Beyond your requirements for support with share plans you can also lean on our experienced and integrated team of solicitors across a range of business legal services. From drafting commercial contracts, to data protection audits, corporate governance support and employment policies and procedures. Harper James Solicitors’ aim is to provide legal support for start-ups and high growth businesses quickly, with affordable and transparent legal subscription plans delivered by experienced, partner level solicitors.
Plus, our corporate team have been recruited from top 100 UK law firms or from large international businesses and have advised clients both as external advisors and as in-house counsel. Find out more about the team here:
Abby Watson is a corporate solicitor, specialising in private equity investments, mergers & acquisitions, EMI share schemes, corporate finance and governance and more.View profile
Adam Kudryl is a Partner and Corporate & Commercial Solicitor at Harper James Solicitors, specialising in strategic investments, acquisitions and sales.View profile
Jas is a corporate solicitor at Harper James Solicitors, advising on corporate governance, mergers & acquisitions, venture capital & investments.View profile
Shubhu specialises in early-stage fund raisings, shareholder arrangements and M&A. Prior to joining Harper James she worked at Mills & Reeve and before that at Addleshaw Goddard and Slaughter and May.View profile
Stephen is an experienced corporate lawyer, with a career including time at DLA Piper and Pinsent Masons. He specialises in mergers and acquisitions and private equity work.View profile
Commercial and Corporate Solicitor
Kate is a commercial and corporate lawyer, advising businesses from start-ups up to global companies on everything from investment and franchising to sale and purchase transactions, exits and much more.View profile
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 £189 per month with additional support from £99 per hour.
A monthly subscription legal support package specifically designed for start-ups and smaller businesses.
For businesses requiring 60+ hours of support a year, with prices equivalent to £99 per hour.
Fully account managed quarterly subscription service for businesses with more complex legal needs.