Share options provide a ready solution to any number of issues that may from time to time face the owners of a company.
Employee share options (such as Enterprise Management Incentives (EMI) options and Company Share Option Plans (CSOPs)) can help align the interests of employees with shareholders, by ensuring that employees have an interest in the value of the company’s shares increasing, or an interest in getting the company to a sale or flotation.
Options can also be used to protect shareholders and manage succession, giving continuing shareholders the right to buy shares from a deceased or outgoing shareholder when they die or leave the company for other reasons.
However, with most share options and those granted to employees in particular, it is vital to ensure that all relevant statutory rules are complied with in order to attract more advantageous tax treatment.
As well as tax issues, great care needs to be taken over the valuation of the shares concerned and as to when and in what circumstances the option can be exercised and to make sure that there is no conflict between the terms of the option and the company’s articles of association.
KBL corporate solicitors will work with you, your accountants and financial advisors to ensure that you chose the right option and that you can rely on it to reward your key employees or to protect you, your family and other shareholders when you need it to.