Enterprise Management Incentive


The grant of options over shares in companies has become an increasingly popular targeted incentive for key personnel. This structure tends to align the interests of the executives concerned with those of the wider shareholders. Share Option schemes are particularly suited to UK based SMEs seeking to recruit and retain key employees. A popular option condition is the ability to exercise only following the sale of a controlling stake - essentially ensuring that the controller of a business can only benefit from the grant. The grant of a Share Option can result in complex tax implications both for employer and employee.

Several statutory Share Option scheme structures have been established in order to encourage this type of arrangement. These schemes offer significant tax advantages to the various parties, provided that (reasonably complex) criteria are satisfied. One such scheme is Enterprise Management Incentive (EMI). EMI schemes have proven popular since they were established in 2000 - it has been authoritatively estimated that there are around 7,000 EMI schemes granting benefits to over 100,000 employees. The structure has been revised several times and is now assumed to be a permanent feature on the UK’s corporate fiscal horizon.

The tax implication and qualifying conditions for EMI are complex. They particularly involve considerations of the valuation of the option shares at the date of grant, and the agreement of such a valuation with HMRC.

Our packaged internet product assumes that our company clients will have already understood the benefits and tax implications, considered the qualification criteria and will have decided to participate in an EMI scheme prior to their decision to buy our product. Our internet EMI product is essentially a turn-key implementation package for businesses who have already decided EMI is the direction in which they wish to go.

We can also advise on the matters mentioned in a bespoke retainer. Please Contact Us for more information. You may also wish to consider our (non- statutory scheme) Share Option product.

How long will it take?

The time taken for our work to conclude depends on precisely what it is we are asked to do. This is a complicated product not amenable to quick implementation, however the drafting of the documents will usually be completed within a few days of taking your full instructions.

Our work includes:

  • Taking your instructions
  • Drafting the EMI Option Agreement
  • Drafting minutes setting up the Scheme
  • Drafting (optional) request for an EMI valuation
  • Drafting form of notice of scheme to HMRC
  • A Guidance service

Money Matters

Our work will be charged at a fixed fee of £1125 including VAT.

Our fee applies regardless of how much work we actually do. In some cases this may mean we’ll get relatively better paid for doing less work than in other cases, in which the fixed fee will barely cover our costs. This is simply the nature of the mutual gamble between a solicitor and their client when they fix a fee.

More detail of all these matters will be outlined in our retainer letter which you will be able to review before you engage us, after pressing the “Buy” button on the website.

If you have any questions or require any further information, please don’t hesitate to Contact Us.