A share scheme can have a positive effect on your company, leading to higher employee retention and better morale through financial incentives. But it’s important to conduct due diligence or you could incur penalties, liabilities and other avoidable issues.
Consult a Company Law Solicitor for expert guidance in picking and implementing the best share scheme for your company.
Share options grant employees the right to buy shares in the business at the end of an agreed option period for a price at the date the option is granted. It is one of two types of growth share schemes available to UK companies - the other being share award schemes.
There are several possible share option schemes available, and our expert solicitors are dedicated to selecting and integrating the most relevant one for your company and its unique goals.
During implementation, our expert solicitors can handle all legal factors, including:
Here are the share option schemes available in the UK:
EMI shares are flexible, tax-efficient schemes that are used most often. They are only available to smaller companies like SMEs, with gross profits of £30 million or less. If you run a family business, then this is often a popular option.
CSOP share options offer the scheme to any employee or director in the company with the option to buy up to £60,000 worth of shares, incentivising workers at all levels. If shares are purchased between 3 and 10 years after being offered them, Income Tax or National Insurance will not be payable on the difference between share value and what you pay for them. CSOPs are usually suited to larger companies that don’t qualify for EMI.
SAYE schemes allow company members to buy shares with savings for a fixed price. Any interest gained is tax-free, though you may have to pay Capital Gains Tax if you sell the shares. Good for companies of all sizes looking for a low-risk, long-term savings plan.
SIPs offer regular saving and buying of shares, and if you keep them for five years, you won’t pay Income Tax or National Insurance on their merit. These are useful for companies wanting to foster a culture of interests aligned with company goals.
Read our blog about buying shares in a business
Crombie Wilkinson are devoted to implementing share options into your company with our vast experience and due diligence, ensuring there are no hiccups, and that if there are issues, that they’re solved with minimal disruption to your operations.
To discuss what company commercial legal advice you need for your business, please contact us or a member of our team: Ian, Richard or Kirsty.
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