See Company Share Option Plan (CSOP).
Approved Options
Co-operative
A co-operative is a business organisation which is owned and operated by individuals for their mutual benefit and which has a constitution which adheres to “co-operative principles”.
Community Benefit Society
A form of Industrial and Provident Society (see below) whose purpose is to trade for the benefit of the community.
Community Interest Company (CIC)
A special form of company, designed for social enterprises which wish to use their profits and assets for the benefit of the community. It is likely to be quicker and easier to establish than a Community Benefit Society (see above).
Company Share Option Plan (CSOP)
An option scheme providing income tax advantages for UK employees working for independent companies. CSOP requires prior approval by HM Revenue and Customs; also known as Approved Options. For more information see our Guide to the Company Share Option Plan (CSOP).
Deferred Payment Shares
See Nil Paid Shares.
EBT Bonus
A bonus paid by an Employee Benefit Trust.
EMI Option Plan
See Enterprise Management Incentives Option Scheme.
EMI Options
See Enterprise Management Incentives Option Scheme.
EMI Share Option
See Enterprise Management Incentives Option Scheme.
Employee Benefit Trust (EBT)
A discretionary trust for the benefit of employees of a particular company or group of companies. Also abbreviated to EBT or called an employees' trust, employee trust, employees' share trust, employee share ownership trust or ESOT.
Employee Share Ownership Plan (ESOP)
A generic term describing any kind of employee share plan or employee share scheme; also used to describe an arrangement involving an employee benefit trust.
Employee-led mutual
A mutual whose members are its employees. (See also Mutual.)
Employee-owned company
A company the whole or a majority of which is owned by or on behalf of its employees, normally on a widespread basis so that all or most staff have a stake in their company.
Employees Share Ownership Trust
See Employee Benefit Trust.
Employees Share Trust
See Employee Benefit Trust.
Employees Trust
See Employee Benefit Trust.
Enterprise Management Incentives (EMI) Option Scheme
An option scheme providing income tax advantages for UK employees working for smaller, qualifying and independent companies, also known as EMI options, EMI option plan, EMI share option. For more information see our Guide to Enterprise Management Incentives (EMI Options).
ESOT
Employees Share Ownership Trust. See Employee Benefit Trust.
Growth Shares
See Hurdle Shares.
Hurdle Shares
Shares of a special class which only acquire a capital value if the value of the whole company exceeds a specified threshold; also known as Growth Shares.
Industrial and Provident Society
A form of business ownership often used by co-operative businesses (see above), registered under the Co-operative and Community Benefit Societies and Credit Unions Act 1965. It is also sometimes used for Community Benefit Societies (see above), which are similar to charities.
Joint Ownership Shares Plan
Describes an arrangement under which shares in a company are jointly acquired by an employee and an employee benefit trust. The value of the trust’s interest in the shares is normally fixed at the same level as the shares’ worth when they are acquired, whereas the value of the employee’s interest is based on any growth in value of the shares after their acquisition.
Joint Venture
A business which is jointly owned by two companies or groups, pooling their expertise.
Limited Company
A separate legal entity which has its own legal personality. It confers on its owners (shareholders) limited liability, so that they are not personally liable to the company's creditors.
Limited Liability Partnership
A form of partnership in which the members have limited liability, so that - unlike a conventional partnership - no member is liable for the obligations created by their fellow members.
Long Term Incentive Plan (LTIP)
Normally a form of unapproved (non-approved) option scheme in which options are granted with an exercise price of zero but may only be exercised if a performance target is achieved. For further information see our Guide Unapproved Share Options and Long Term Incentive Plans (LTIPs)
Mutual
A mutual is owned by its members and is created to fulfil a shared purpose. Its members would typically be its customers (e.g. the Co-Op stores), its suppliers (e.g. a farmers’ co-operative) or its employees (e.g. an employee-owned company such as John Lewis). See our Guide to Public Service Mutuals.
Nil Paid Shares
Describes an arrangement under which an employee acquires shares now but doesn't have to pay for them immediately. Also known as partly paid shares or deferred payment shares.
Non-approved Options
See Unapproved Options.
Partly Paid Shares
See Nil Paid Shares.
Restricted Shares
Shares which are subject to initial restrictions affecting their value e.g. non-voting, subject to forfeiture if the employee leaves within a specified period. These restrictions may fall away after that period has passed.
Save As You Earn Options
See SAYE Option Scheme.
SAYE Option Scheme
A UK Revenue approved option scheme under which options may be granted to all employees of an independent company. Employees must agree to save a fixed monthly or weekly amount which at the end of the option period they may either use to exercise their options or simply withdraw. Also known as Sharesave and Save As You Earn options. For more information see our Guide to SAYE Options.
Share Incentive Plan (SIP)
A UK Revenue approved scheme for providing employee shares, enabling employees to purchase shares (partnership shares) out of gross pay or receive free shares free of income tax and National Insurance. Shares must be offered to all employees. For more information see our Guide to the Share Incentive Plan (SIP).
Sharesave
See SAYE Option Scheme.
Social Enterprise
A business which wishes to use its profits and assets for public benefit, rather than creating rewards for investing shareholders, although some limited dividends are allowed.
Unapproved Options
Employee share options which (unlike EMI options, CSOP options and SAYE options) do not provide participants with income tax advantages; also known as non-approved options. For more information see our Guide to Unapproved (Non-approved) Share Options and Long Term Incentive Plans.
