Attracting and retaining employees that will grow and advance your business is of crucial importance and most often represents the foundation of future success. Competitive employee benefits and an effective incentivisation programmes can underpin competitive remuneration arrangements within a top performing business.

Option Schemes

Most high-growth and start-up companies find it beneficial to align the interests of their employees, consultants and management with the objectives of the company (very often exit focused). The most popular and tax efficient of those is an Enterprise Management Incentive (EMI) scheme.

EMIs are only available for employees and directors who work for the company for at least 25 hours per week, or if less, 75% of their working time and there are financial limits that the company and employees must comply with. The company’s accountant or tax adviser will also be able to assist the company with any share valuation that is agreed with HMRC in order to assure the parties that the option’s tax efficiency will be obtained.

MBM Commercial can assist your company with the legal documents required to put in place an option scheme for your employees. It might include some of the following characteristics:

  • Tailored for general staff or senior management/board
  • Exit-only – options can be exercised and shares purchased only when the company is sold or IPOs
  • Vesting - staff can earn options over a set period in instalments
  • Performance criteria – sales or profit targets can be set as conditions to options vesting
  • Lapsing – options lapse if the employee leaves.

There are also options that do not benefit from tax relief and we can help advise on alternative options based forms of incentive such as phantom options.

Alternatives to EMI Options

An option scheme may not always be the right fit for you or your company. It might be that the company is not eligible for an EMI scheme or that the recipients of such a scheme are not eligible to take advantage of the tax benefits.

The MBM team regularly assist companies with growth share incentive schemes which involves creating and issuing a special class of shares which only benefits in the future growth in value of the company.

Large work force to administer?

MBM can offer you an integrated managed options register, tracking options granted to staff and making future option rounds and any due diligence on funding rounds much easier for the company

The sale of my business was completed successfully thanks to the 
unremitting dedication and hard work contributed by the team at MBM. 
Few can claim to meet their exacting standards.

Contact our Corporate Solicitors in Edinburgh & London Today

If you are looking to put an option scheme in place, we can advise.

Useful Guides

An Introduction to the Investment Process

We’ve prepared this short guide to provide you with an introduction to the process so that you are equipped to navigate the path to getting funding.

About MBM Commercial

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Our Holistic HR service offers employers a retainer package that provides you with specialist employment law advice at a fixed cost - without the uncertainty and worry of escalating or unknown fees. You’ll get responsive and bespoke HR advice for your business delivered in an understanding and friendly way. It’s like having an on-demand employment law team at your fingertips.

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