Share Schemes
We advise our clients on how to use their share structure to retain and motivate key staff.
We also make sure that the share structure attracts and rewards investors, by ensuring that tax is minimised at the time of investment, on distributions of profits and on disposal of the investment.
- Enterprise Management Incentives Schemes
- Enterprise Investment Schemes
- Share Structure
Enterprise Management Incentives (EMI) Schemes
EMI schemes can motivate and retain members of staff, who are key to the long term success of a business. We assist our clients in designing and implementing the right scheme for their circumstances.
Shares can be issued in the form of share options. Share options delay the transfer of equity, until certain criteria such as the sale of the business are met.
This avoids the risk of minority shareholders being created and these shareholders then leaving employment before the majority shareholders’ goals have been attained.
However, even this risk can be reduced by the alternative route of employee shares, which are returned to the company at the end of the holder’s employment.
Enterprise Investment Schemes (EIS)
Obtaining investment funds can be assisted by offering investors the tax advantages of EIS. The incentives to investors are that there is 20% income tax relief on the investment and any capital gain is not chargeable to tax (whilst capital losses are allowable).
We guide clients through the complexities of obtaining EIS status and assist with monitoring continued compliance, to ensure the status and benefits are not jeopardised.
Share Structure
Having the right share structure of the business is fundamental to tax and strategic business planning. We assist our clients in establishing or restructuring share ownership, so that both dividends and sales proceeds are received tax efficiently.
By the use of such methods as limited classes of shares, employee shares (which are returned to the company at the end of the holder’s employment) and EMI, we can implement a share structure that will assist the company’s owners to achieve their long term goals. This may be by focusing key employees on a future business sale, either to a third party or to the same key employees via a management buyout.
