- Do I need an all employee plan or one for my key people only?
The priority for many companies is to create a share plan for their key people. Others take the view that expanding share ownership more widely will have a greater positive impact. Your own approach is likely to depend on your business, the profile of your employees and how many shares are available for use in your plan.
An all-employee plan is likely to need more administration, although if you wish this can be outsourced.
- How do I work out what sort of plan is best for my company?
This will need some advice. There is no completely off-the-shelf solution, although most share plans use the same building blocks.
- The shares in my company aren't listed. How can my employees turn them into cash?
If your company's shareholders are working towards an exit (sale or flotation) that could be made the target for when employees can sell their shares. If you have no specific exit plans, you will need to consider arrangements allowing employees to sell their shares internally.
- Does my share plan need shareholder approval?
In many cases you will need your shareholders to approve the launch of a new share plan.
- Are there any tax incentives?
Yes, in the UK there are tax incentives for both your company and your employees, although your share plan will need to meet some precise requirements to secure income tax reliefs.
- How long will it take?
Your share plan could be up and running in weeks, or sometimes even days, if you need it urgently. However, it is better to plan carefully if time allows, and a time frame of two to three months is typical - a little longer if you choose an Inland Revenue approved plan carrying income tax benefits.
