Set up employee share schemes
Choosing the best share scheme for your business
The first step in choosing a suitable share scheme is to decide on your objectives for introducing such a scheme.
This could be to:
- attract staff
- offer an incentive to retain staff across the business
- provide targeted incentives to selected employees
- conserve cash and reduce the cost of pay and/or bonuses
Choose the particular scheme that will help you achieve these objectives. Employees can be given shares which are held in a trust, receive share options or purchase shares on attractive terms.
You will also need to consider:
- how much to spend on the plan
- details of the plan, eg employee eligibility
- what will happen if the scheme needs to be wound up or if the tax incentives change
- regulatory requirements, eg only businesses with a maximum of £30 million in gross assets can have an Enterprise Management Incentive scheme
- how to value your shares - read information about valuing unquoted companies on the ifsProShare website
- HM Revenue & Customs reporting requirements
- whether you prefer an approved scheme, with the associated tax and National Insurance contribution benefits, or an unapproved scheme which allows you flexibility of design
It is worthwhile talking to a solicitor or specialist adviser before making a final decision. You can find a solicitor through the Law Society Solicitors Online website .
You can also find a specialist share scheme adviser on the ProShare website .
Subjects covered in this guide
 Print
This Page
Source - Business Link; Crown Copyright.
|
