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CORPORATE LAW

Enterprise Management Incentives (EMI)

Atkins Dellow > Business > Corporate > Enterprise Management Incentives

Specialist EMI Corporate Law Solicitors

Enterprise Management Incentives are a great way of efficiently distributing shares of the company to its employees. However, there are some things to be aware of when considering whether to use this structure or not.

Get in touch with our EMI Solicitors on 0330 912 8338 for a no-obligation chat today.

If you’re interested in setting up an Enterprise Management Incentive Scheme for your business, it’s important to make sure that this is done correctly.

Having an expert Business Law Solicitor involved in big decisions like this one is never a bad thing and will ensure that no problems arise in the future as a result of a mistake in the paperwork.

Need Legal Advice?
Call 0330 912 8338 for a no-obligation chat with one our experts today.

Need Help?

Call 0330 912 8338 to have a no-obligation chat with our expert Business Law Team. They’ll be happy to talk through the process with you, explain what we do, and answer any questions you have.

Alternatively, you can email us with your query and we’ll help in any way we can.

Enterprise Management Incentives (EMI) FAQs

What are Enterprise Management Incentives (EMIs)?

Enterprise Management Incentives are tax advantaged employee share option schemes. They are used by companies all over the UK who wish to distribute shares in the business to their employees.

What are the criteria that has to be met to qualify for an Enterprise Management Incentive (EMI) Scheme?

For a business to utilise an Enterprise Management Incentive (EMI) Scheme they must have under 250 employees and have under £30 million in gross assets. An Enterprise Management Incentive (EMI) Scheme can dispense no more that £250,000 worth of shares per individual.

Employees have to work at least 25 hours per week or spend at least 75% of their time working for the company to qualify for an Enterprise Management Incentive (EMI) Scheme. Any employee who also owned 30% or more of the share capital before the scheme was introduced cannot take part in it.

Disqualifying Events

Although there aren’t many restricting factors that would make an employee exempt from an Enterprise Management Incentive, there are some disqualifying events to be aware of:
• The business gets bought and falls under the control of another company
• The company failing to meet the trading activities test
• A significant variation in the terms of the option
• A non-commercial alteration to the share capital of the company that increases the value of shares under option.
However, if the Enterprise Management Incentive option is used within 90 days of the disqualifying event then all Income Tax and National Insurance Contribution benefits are kept.

What are the benefits of using an Enterprise Management Incentive (EMI) Scheme?

Enterprise Management Incentive (EMI) Schemes allow employees to be rewarded with shares in the company without being taxed a combine total of 60.8% through Income Tax and the employee and employers National Insurance contributions as it would be classed as a cash bonus or unapproved option. Instead the employee will only be taxed through Capital Gains Tax at a rate of 10%.

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