Facebook Linkedin-in Youtube Instagram
Contact Us

Enterprise Management Incentive Scheme

Enterprise Management Incentive (EMI) Schemes provide selected employees with the option to acquire shares in the company that they work for.
Request a Callback
Read our Case Studies
Home
/
/
/
Enterprise Management Incentive Scheme

Setting up an EMI scheme, the company must satisfy certain conditions. The employees who are to be granted options must also satisfy conditions in relation to their working arrangements. If the conditions are met, favourable tax treatment will apply for both the company and the employee.

An EMI scheme consists of an Option Agreement, and the Plan Rules. The Option Agreement itself can be tailored to consider factors such as job role, seniority and the value different employees bring to the business. The scheme can therefore apply to different employees in different ways.

There are a number of other benefits to setting up a company share scheme, but as a founder of a startup, growth will most likely be your key motivator.

A share scheme is a way of founders sharing equity with employees. Equity in a company means ownership – anyone who holds shares in a company owns part of the company (and therefore its assets).

Why should startups offer equity?

Share schemes can be equally, if not more, beneficial to startups with few employees than to large companies with many employees.

Book a Consultation

Key contact

Yavan-Brar-PNG
Yavan Brar
Chief Executive Officer
View Profile
amplifi
Belmond
bmsteel
cote
DF
one-aldwych
RCL
rina
silversea
vistyr
windward

What our clients say about us

HC acted for us in a corporate reorganisation, the sale of shares to an EOT and implementing an EMI for key individuals. The matter was complex and required patience and clear solutions to a number of issues to achieve the goals. Yavan and Sophie provided detailed advice on statutory requirements, a clear explanation of legal terminology, and worked efficiently to allow us to implement the EMI within the necessary timeframe. Great support from Yavan and the team.

Insights

Get valuable insights from our articles.

Rural business
Farmer cooperation banner, Investments in livestock business. International farm collaboration and help in industry cattle on background barn with cow

Preserving a farming legacy through strategic partnership planning

The Herrington Carmichael Corporate team advised the partners of a long-established family farming partnership on the preparation of a bespoke…
Read more
Banking & Finance
AdobeStock_1381478754 no logo

Financing an acquisition through debt: five key considerations for borrowers

Debt finance has re‑emerged as a mainstream option for UK business acquisitions. With lender confidence improving and structures becoming more…
Read more
Corporate Law
Auditing, banking compliance, financial investigation, law, risk assessment and verification. Businessman using a laptop and magnifying glass to examine financial documents and legal information.

Technology Due Diligence in M&A: Identifying Hidden Risks in Tech Transactions

Technology driven acquisitions can deliver rapid growth, valuable intellectual property and access to scalable platforms. However, they also carry a…
Read more

Meet our experts

Dedicated professionals ready to assist you.

Yavan-Brar-PNG
Yavan Brar
Chief Executive Officer
Sophie Protheroe PNG
Sophie Protheroe
Senior Solicitor

Frequently Asked Questions

Find answers to your most pressing questions about our services and processes.

EMIs are most commonly implemented by entrepreneurial companies of small to medium size. To qualify companies must meet certain criteria. They must:

  • Be independent, therefore not a 51% subsidiary of another company and any subsidiaries your company may have must also qualify.
  • Carry on a “qualifying trade” – certain trades are excluded, for example banking, insurance, property development, farming and hotel management.
  • Have fewer than 250 full time employees
  • Have gross assets of less than £30m
  • Be permanently established in the UK

EMIs are relatively simple schemes to implement and are, in turn, easy for the employees concerned to understand.

EMIs are HMRC ‘approved’, meaning that they receive favourable tax treatment is in relation to both the company and employees.

There is a typical “lawyer’s answer” to this question, which is – it depends! The scheme that is best suited to a company depends on the founders’ motivations, which could range from tax effectiveness, affordability or security for their own interests.

Types of share scheme

  • Enterprise Management Incentives (EMIs)
  • Company Share Option Plans (CSOPs)
  • Save As You Earn (SAYE)
  • Share Incentive Plans (SIPs)
  • Growth Shares
  • Unapproved Options
Book a Consultation