CLOSE SEARCH
There are 3 main types of employee share schemes - employee share ownership plans (ESOPs), share incentive plans (SIPs), and share purchase plans (SPPs).
Key initial steps and considerations will include :-
Designing the scheme - to meet its objectives and to ensure that it complies with all applicable laws and regulations.
Marketing the scheme - to ensure employees are aware of the benefits of participating in the scheme.
Administering the scheme -appoint an administrator to be responsible for managing the scheme, including issuing shares, collecting payments, and keeping records.
There are a number of legal requirements that must be complied with when setting up employee share options and schemes in the UK. This includes:
Obtaining shareholder approval
Drafting and registering the scheme document.
Obtaining tax clearance
Providing information to employees - including the terms of the scheme and the risks involved.
Things to be aware of and consider for employees will generally include :-
Illiquidity - employees may end up locked in, with their shares not readily available to sell.
Company performance - the value of shares will depend on the performance of the company.
Capital gains tax - Employees may be liable to pay capital gains tax when they sell their shares.
Income tax: Employees may be liable to pay income tax on the value of shares that are granted to them under a share option scheme.
Leaver penalties - employees may forfeit unvested shares if they leave job before the vesting period is over or be penalised by bad leaver provisions
Telephone -
9am to 5pm
Director - Corporate and Commercial Law
Simon, who qualified in 1988, is one of the Taylor Rose Directors and advises on a wide range of corporate and commercial matters with particular emphasis on mergers, acquisitions, investments, and disposals.Simon leads the commercial team which......Call the Taylor Rose team or fill out the form below and we will get back to you as soon as possible.
Telephone opening hours -
9am to 5pm