Share options continue to be a very popular and effective way of retaining, incentivising and rewarding employees and other workers. They can also act as a steppingstone for management buy-outs. At Tollers, we provide advice to a wide variety of businesses, ranging from those that are just about to start trading to mature businesses that have been operating for many years. We work with business owners to design and implement schemes that work for the business and provide real incentives to the recipients.
What is a Share Option?
A share option is where the employee is granted a right to receive shares at the end of an agreed option period for a price at the date the option is given.
There are various HMRC Approved Schemes.
One crucial factor to look at whenever a company is considering share options is taxation. Some share schemes can result in generous tax savings, whereas providing shares or other incentives can trigger tax liabilities. It is imperative that proper tax advice is sought when designing share schemes. We are familiar with the tax implications of granting share options and well-versed in collaborating with specialist tax advisers to comply with tax legislation, secure tax benefits and avoid tax liabilities.
Specialist Corporate Lawyers
We provide advice on “exit only” share options (an option exercisable only if there is an exit event such as a share sale or listing) and options where benefits are conferred upon agreed conditions being satisfied or targets being achieved. The latter scheme may involve our amending the articles of association of the company to cater for future employee shareholders and the issues that can arise, such as achieving an exit for those employee shareholders and dealing with their shares should they subsequently leave.
One of the main functions of any share scheme is to provide a capital sum for employees if there is a future sale. Tollers have dealt with a number of significant sales involving the exercise of share options and the participation of employee shareholders in the sale, resulting in significant capital sums being received by those employees.
Tollers can assist with the following share option and incentive plans:
- Enterprise Management Incentive (EMI) options
- Non-approved share options
- Growth shares
- Phantom share schemes
- Employee ownership trusts
Talk to Tollers
Our corporate solicitors actively advise clients on share schemes. Get in touch with our team of experts so we can determine your requirements and advise on whether and which scheme is suitable for your business.