Growth Shares

Boost your benefits package for key employees by offering them growth share plans.

Your top employees are one of your most valuable assets – make sure you look after them by offering them a chance to own a stake in the business they’re helping to build. Our expert corporate solicitors can explain to you how growth shares work, and help you structure a scheme so that you and your team achieve the maximum benefit of a flexible plan with no statutory requirements.

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 schemeshurdle sharesflowering 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

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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

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.

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.

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.

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.

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:

Pricing plans

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:

City

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.

Enterprise

Have legal peace of mind for £189 per month with additional support from £125 per hour.

A monthly subscription legal support package specifically designed for start-ups and smaller businesses.

On-Demand

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.

What next?

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A national law firm

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.

Our commercial lawyers are based in or close to major cities across the UK, providing expert legal advice to clients both locally and nationally.

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