Enterprise Management Incentives (EMI) Schemes
Enterprise Management Incentives Scheme
EMI schemes provide a tax-efficient and flexible way to incentivise people in your business by enabling those people to become shareholders. Normally aimed at managers they are open to any member of your team.
Why do they work?
Growth – With key people incentivised to grow your business as shareholders, they will share in the ultimate growth of the company.
Retention – Your key people will be easier to retain because they will take a long-term approach to working in the business.
Succession – Your key people will find it easier to take over from you once they have a foothold through owning shares.
Tax – the EMI scheme provides for a relatively cheap way to own shares with a favourable capital gains regime for the employee.
How flexible are they?
Exit – They can be designed to “cash in” only on the ultimate sale of the company.
Targets – EMI options can be designed to vest on the achievement of growth or profit targets.
Timing – the options can be available at any time during a 10 year period.
What are the rules?
Employee – the scheme is available to employees who work not less than 25 hours a week and do not already hold a material interest in the company.
Main company – shares must be offered in the top company if you have a group of companies rather than subsidiaries.
£250,000 – this is the maximum amount of options that an employee can hold but the cap is still generous.
Technical – the qualifying rules need to be examined carefully and advice is needed. Some industries are excluded so it is necessary to check.
Call us now – a number of our clients have EMI schemes in place. We are happy to have a preliminary discussion with you to see if an EMI scheme would be appropriate for your company.