It is becoming increasing more common for companies to want to give shares to their employees.

Doing this can make the employees feel more engaged, more “part of the business”, and can reward them for their commitment to it.

Giving shares to employees, particularly senior employees, can be the first step in a company’s longer term succession planning.

But what is the best way for a company to issue shares to employees?

At first glance the simplest way would be to merely allot new shares to selected employees.  However, careful consideration needs to be given to how much the company is to ask the employees to pay for those shares. Asking the employees to pay anything less than “market value” could result in adverse tax consequences for both the employees and the company.

There may however be justifiable commercial reasons why a company might not want to give its employees shares now, but wants to use the prospect of future shares as a way of incentivising its employees to stay with the business.

Therefore, an alternative would be to grant employees share options under which they can acquire shares at a later date.

Ashtons Legal has experience of dealing with many types of employee share option schemes and can guide you through the steps and procedures which need to be followed in order to manage issuing shares to employees in a way that meets your business objectives.

Our Corporate and Commercial team is highly ranked by leading client guide, the Legal 500, for our independently recognised expertise. You can this be assured that your business is in safe hands when working with our team.

If you are a business owner and are looking to incentivise selected key employees to stay within your business by rewarding them with shares then contact us for an initial no obligation discussion.

Contact Our Employee Share Options Solicitors in East Anglia

For practical advice on any type of employee share option scheme, as well as any other business legal advice you need to reach your goals, get in touch with our specialist Corporate and Commercial lawyers in Cambridge, Bury St Edmunds, Ipswich, Norwich and Diss.

To set up an initial consultation:

  • Give us a call on 0330 404 0767; or
  • Fill in our simple online enquiry form and we will be in touch shortly.

Our employee share options expertise

EMI Options

An enterprise management incentives (EMI) scheme is a highly flexible and tax-efficient share option scheme designed specifically for small/medium-sized companies (i.e. companies with assets of under £30m and which employs less than 250 people).

A HMRC approved EMI option would entitle selected employees a tax efficient way to purchase shares in a company at an agreed price per share if certain circumstances, referred to as “vesting criteria”, arise.

An EMI scheme will not be right for every company, but granting employees HMRC approved EMI options can be the most tax efficient way for getting shares into the hands of employees.

More information about EMI option scheme can be found within our EMI Guide.

Unapproved Options

These are similar to EMI options, whereby instead of giving the employees shares now a company can grant them options to acquire shares in the future, but they are not approved by HMRC and therefore may not be as tax efficient.

These may be appropriate where a company has justifiable commercial reasons for not wanting to give employees shares right away but where either the company or certain individuals who do not quality for EMI options for some reason.

Another advantage that share options have over issuing shares to employees at the outset is that they can be drafted so if an employee leaves the option lapses. If they have already been given the shares, when an employee leaves they will have to be clawed back somehow.

Contact Our Employee Share Options Solicitors in East Anglia

For practical advice on any type of employee share option scheme, as well as any other business legal advice you need to reach your goals, get in touch with our specialist Corporate and Commercial lawyers in Cambridge, Bury St Edmunds, Ipswich, Norwich and Diss.

To set up an initial consultation:

  • Give us a call on 0330 404 0767; or
  • Fill in our simple online enquiry form and we will be in touch shortly.


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