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Enterprise Management Incentives (EMI) advice

from £2,995 +VAT

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What is an Enterprise Management Incentives?

Enterprise Management Incentives or EMI is a type of Employee share scheme. It allows employers to grant share options to key employees, as a reward for their efforts within the business and/or to retain and incentivise key staff. Under this scheme, a company can grant options to selected employees to allow them to acquire its shares over a prescribed period.

What companies can offer EMIs?

To grant EMI options, a company must be an independent trading company with:

  • gross assets of £30 million or less

  • fewer than the equivalent of 250 full-time employees

There are certain trading activities which will not qualify, such as banking, farming, property development, provision of legal services and ship building.

For more information read Enterprise Management Incentives (EMI share scheme).

What is a share option?

A share option is a right to acquire shares in a company, on terms set out in an option agreement. This will specify how many shares an employee may acquire, how much they will have to pay for the shares, and when the shares can be acquired through the exercise of the option.

Option exercise may occur, for example, after a specified period of employment, or upon the achievement of performance targets, or upon the sale of the company.

Why have an EMI scheme?

EMIs improve recruitment and retention prospects for small and medium enterprises and support their future growth. They also:

  • align employees’ interests with the company’s

  • reward, motivate and incentivise key staff

  • retain key staff for a longer term

  • promote share ownership in the company in a tax efficient manner

How can Rocket Lawyer help?

Rocket Lawyer has a panel of solicitors available to assist you in setting up an EMI scheme for your business.

As part of this service, our lawyers will contact you for an initial free consultation to answer your questions about setting up an EMI scheme and determine the fees applicable. They will then assist you with setting up an EMI scheme, including the drafting of legal documents, the valuation of share and HMRC approvals.

Specifically, our lawyers can also assist you with drafting an EMI option agreement or separate EMI option scheme rules and an option certificate (together with a notice to exercise) for each employee. They will review the company’s articles of association and make any necessary changes to implement the EMI scheme.

They will also assist with share valuations (to determine the price of the share options) and with applying to HMRC for agreement to the proposed share valuation, compiling supporting documentation and any communications with HMRC if required. 

Our lawyers will also assist in the drafting of shareholder resolutions and board minutes approving the terms and implementation of the EMI option scheme and the grant of EMI options. 

Lastly, they will serve formal notice of the grant of the EMI options to HMRC.

The fixed fee offer ranges between £2,995 - £4,995 + VAT, depending on the number of employees and other aspects of the EMI scheme sought to be set up.

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