Some businesses have a policy of allowing its employees to take out company shares. The arrangement is a way of providing benefits for employees, which may include executive directors but not normally non-executive directors.
It can take the form of shares, interests in shares, share options or anything else where there is an advantage to be gained from having shares.
A company may wish to establish an employee share scheme for its employees for a number of reasons. These may include acting as an incentive for the employee to stay with the company, to reward employees for their workplace performance or to allow employees to obtain and sell their shares in a tax-efficient way over a period of time.
In short, shares can be used to attract potential employees and then as an incentive for motivation and retention.
Private companies are generally less likely to offer a share option scheme because there isn’t a ready-made buyer to sell them on to, but private firms will often set up plans in anticipation of a trade sale or public offering.
Another option for private businesses is to set up an Employee Benefit Trust - an internal mechanism whereby shares can be bought from the employee and then sold to other employees.
If your company has introduced or is thinking of introducing a share option scheme, you will need to keep up to date with the legal requirements and what needs to be done to comply with the appropriate legislation.
Lanyon Bowdler has a team of experts who are dealing with these issues on a regular basis. They are here to offer you the best informed advice available so you can avoid any potential problems.
We have offices in Shrewsbury, Telford, Oswestry, Ludlow, Hereford, Bromyard and Conwy, where our friendly, knowledgeable staff will be happy to welcome you for an initial chat about your requirements. We work with businesses across Shropshire, Cheshire, Herefordshire, The Marches, Mid & North Wales, Birmingham, and the Midlands. As a leading national corporate law firm, we can represent your business interests wherever you are based in England, Wales or Northern Ireland.
For more advice about how we can help you please use the online enquiry form and someone will get in touch with you.