EMI Schemes
Let’s cut to the chase. If you run a SME then an Enterprise Management Incentive (EMI) scheme is more often than not going to be the right choice for your business. These schemes give employees a stake while affording you several key protections.
Benefits of an EMI scheme:
- The employee holds options not shares, meaning they have no rights to vote or dividends during the vesting period
- The rules on EMI are very flexible which means that there is no requirement for all employees to have the same options or terms
- There is tax relief for both employer and employees
- They are HMRC approved
- They can be paired with other share schemes
Employee Ownership Trusts
Employee Ownership Trusts or EOTs own a controlling stake in the business on behalf of employees. These were introduced in 2014 as part of the government’s ambition to encourage employee-owned businesses in the UK. There are various tax benefits for shareholders.
Ideal for exit where the founder(s) is aiming to secure their legacy with a trusted team.