There's quite a lot of documentation that you'll need to give employees EMI options. First, you should get an EMI Valuation with HMRC, which requires emailing them an application with a few documents attached (all created by our platform!) You should then set up your EMI Scheme (if you haven't done so already), which requires creating the scheme rules, making the grants for your employees and not to mention tracking them.
The EMI Valuation and EMI Scheme can be bought independently of one another, or together as part of a package. If you'd like to discuss what suits your business needs, please get in touch with your Account Manager or book in a demo here to see how SeedLegals can help with you reward your team with EMI options.
The EMI Valuation
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HMRC filings for your company valuation: The platform will automatically create for you a completed application for EMI Valuation (VAL231) form and cover letter for the Valuation which you can send off alongside your application to HMRC - easy!
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Valuation Report: If you want to get a lower valuation that your last funding round, or if you've never done a funding round before, you'll need a valuation report to send off to HMRC. Our platform can produce you an expert report in a fraction of the time and cost of an accountant, to help you achieve the optimum valuation.
The EMI Option Scheme
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Option Scheme Rules: An EMI scheme needs rules - outlining among other things - what the vesting provisions are, what happens during an exit of the company and how employees are treated when they leave. With SeedLegals, you get a fresh set of rules, designed exactly to what you need, not a template.
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Grant Paperwork: Once you've got the valuation approved by HMRC, you can then start sending out option agreements to your employees. Our platform makes this a breeze. In a few clicks you can specify who you are granting options to, how many options are granted as well as the conditions attached. We'll create for you the grant paperwork for the company and employee - no more copying and pasting. You can even sign the grants online.
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Option tracking: As your team grows, it gets harder to figure out exactly who has what, what's vested and what's left to vest. But once you've granted options, you'll have access to our beautiful dashboard, which can show you exactly how many options are outstanding, vested and exercisable - no more Excel.
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Exercise of options: To cap it off, once an option is exercisable, and the holder chooses to exercise it, the platform can create a notice of exercise (effectively the holder saying they are converting their options into shares now), and even the SH01 for the company to file with Companies House. We'll even provide you a Joint NIC Election form if you want to completely safeguard your company from any unwanted NIC tax liability.
- Termination of options: Sometimes options need to be terminated, it happens. If this is the case for you, we’ll provide a Deed of Termination.
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EMI Notifications: HMRC requires that you let them know about the grant of EMI options - a so-called "notification". You have 92 days to notify them, and on SeedLegals, you can instantly export an excel file detailing your grants and upload it to your HMRC account. To note, the notifications are done on the HMRC Portal (and not on platform) and are ultimately your responsibility to complete. You can check out our handy guide on EMI Notifications here.
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EMI Annual Returns: On top of the notifications above, every company with an EMI scheme needs to do an annual return every June (due July 6). We provide you with a reminder that this deadline is approaching but the return is completed on HMRC's portal and is your responsbility. If you need support with the return, please speak to your accountant about the filing itself or refer to our step-by-step guide on this here.
If you want to discuss any of these in further detail, please speak to your Account Manager or book in a demo. Alternatively, you can also get in touch using the chat box at the bottom right of the page.
On another note, if you were wondering... here is an article on how much does an EMI option scheme cost.