You may be looking  to provide a long term reward, through share ownership or share options, to one or more key people as an incentive and reward linked to your company ultimately being sold or floated.  Even if you do not have any definite future plans for change of ownership it may be important to involve your key people in ownership as part of your strategy to develop the business.
 
Whatever your situation, you need to find the share scheme best suited to your company. 
 

What kind of share scheme should you choose ?

An EMI Option (Enterprise Management Incentive) Scheme is used by most companies that meet its requirements as it is both flexible and tax efficient.  To be eligible, your company must not be too large (more than £30 million of gross assets), it must not be controlled by another company, it mustn’t have more than 250 full time equivalent employees, its trade mustn’t be on a list of “non-permitted trades” and each option holder must work for your company full time.  As it is a good solution for many companies we have provided a detailed explanation of EMI Option Schemes.   
 
If an EMI option scheme is not feasible, you might consider other approaches, including approved options, unapproved options and direct share ownership.   Other solutions of which you may be aware include:

• Approved Options
• Non-approved Options
• Growth (or Hurdle) Shares
• Share Purchase – Immediate Payment
• Share Purchase – Deferred Payment
• Restricted Shares
• Joint Ownership Shares
• Cash Payment on Sale of the Company
• EBT Bonus

 
Which Share Scheme for Key People in Private Companies?  provides information about the full range of alternative approaches that you could take.   You can also find a lot more information about share schemes in our Resources section. If you would like a preliminary discussion about your company’s situation, please contact us.