There's quite a lot of documentation that you'll need to give employees EMI options - the rules itself, the grants for employees and not to mention tracking them (all to often until recently in an Excel spreadsheet). It's easy to get confused about what you need and what you don't.
Luckily at SeedLegals, we've got you covered for everything, including:
- 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.
- HMRC filings for your company valuation: Once you have your scheme rules, it's good practice to agree your valuation with HMRC. You can stick to your previous funding round one if you like - but you should still send off what's known as a VAL231 form to HMRC - so you can be certain of any future tax treatment. SeedLegals automatically creates for you what you need to send off to HMRC, easy!
- 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 (usually lowest valuation)
- 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 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 online.
- EMI Notifications: HMRC requires that you let them know about the grant of EMI options - a so-called "notification". You have 92 days to let them know. It's important to get this right - as HMRC late filing fees can quickly add up. On SeedLegals, you can instantly export the filing and upload it to your HMRC account - no more handbooks, errors or fines!
- EMI Annual Returns: On top of the notifications above, every company with an EMI scheme needs to do an annual return every June. We provide you with a reminder and what you need to file and when.
- 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.
- 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 into shares now), and even the SH01 for the company to file with Companies House.
Book a demo today to see how SeedLegals can help with you reward your team with EMI options.
If you were wondering... here is an article on how much does an EMI option scheme cost.