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What kind of share scheme?We work mainly with private and smaller listed companies. We know that your company faces its own challenges and, rather than taking an off-the-shelf or commodity solution, it will need a share scheme that's been carefully designed to help it meet them. Our focus is on helping you find the right share scheme design, then putting it in place. Key StepsIf you ask for our help in creating your share scheme, these will often be the principal steps:
Throughout, you will be looked after by the same qualified lawyer that we have assigned to you, with Robert Postlethwaite retaining personal knowledge of your scheme's progress and available to discuss it with you. Building blocks for your share schemeOne of the first questions you need to think about is whether you want a share scheme for one or more key employees, or to spread ownership more widely. You should also think about choosing a scheme which doesn't make employees pay income tax on the benefit they derive from it. For existing shareholders, this is important because it enables a greater after-tax benefit to be delivered to employees from a given number of shares, minimising how much of the company's value they need to share. Employees have the prospect of receiving a benefit which is only taxed when turned into cash, and often at a lower rate than a simple cash payment. Your key peopleThere are two share schemes which deliver financial reward to key employees, free of income tax. Both of these are share option schemes:
Detailed conditions apply to each of these share schemes, and you have various
choices about how to structure them. If your company can't meet any
of the conditions, there are plenty of other approaches, but any financial
benefit employees receive is likely to be subject (at least in part)
to income tax and perhaps also National Insurance. [Some alternative approaches] All your employeesThere are two all employee schemes which give income tax relief for UK taxpaying employees:
Shares must normally be left in a special trust for five years, any growth in their value over that time being free of tax. Various other detailed conditions apply. You have various choices about how to structure each of these schemes. If
your company can't meet any of the conditions attaching to SAYE
options or the SIP, there are plenty of other approaches, but any financial benefit
your employees receive may in some cases be subject (at least in part) to income
tax and perhaps also National Insurance. [Alternative approaches] Communication and TrainingFor your share scheme to succeed, you will need to explain it clearly and simply to your participants when it's launched, and keep them informed about your company's performance over the scheme's life. We produce crystal clear share scheme communications - written guides, slide shows, intranet pages and other media - using communication styles suitable for your particular employees. If you have employees who need training in share schemes, please tell us about your needs and we will suggest a training solution. We are enthusiastic and engaging training providers, able to demystify share schemes for any audience. Since the beginning of 2003 over 600 people have significantly improved their share scheme knowledge in courses which we have designed and delivered. Please contact us to tell us more about what you want to achieve so we can help you work out the best potential solution. |
| Postlethwaite & Co is regulated by the Solicitors Regulation Authority, number 385417. Address: 11-15 Betterton Street, Covent Garden, London, WC2H 9BP |
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