Step 1: Start your EMI Valuation
The homepage from the image above can be found within the 'Share Options' tab within the SeedLegals menu. You can get started on your EMI valuation by selecting the ‘Manage’ icon (circled in green below).
Step 2: Select your EMI Valuation approach
Now, you can choose how you would like to approach your valuation.
SeedLegals Valuation Tool: The SeedLegals valuation tool allows you to achieve an extremely generous discount on the price per share your employees eventually pay to exercise their options - a great way to award them for their hard work!
Valuation of previous funding round: You can also opt to stick with the valuation of your previous funding round meaning employees will pay the same price per share that investors did. You can only use this option if you’ve had a funding round (or if you’re pre-revenue and have no assets - then you can use this option to create a nominal value valuation).
Step 3: Accessing your valuation
When you return to the Option Scheme homepage, click ‘Manage’ as we did in step 1, your screen should now look like the above.
This is where your valuation is stored. Click ‘EMI Valuation’ to go to the next stage of the valuation process. Only a few more steps to complete before you can get this sent over to HMRC. We will take you through these steps below.
Step 4: Filling out your valuation report
If you have paid for the SeedLegals valuation tool (See Step 2) this section is particularly important as the financial information you input here will help determine your Unrestricted Market Value (UMV) and Actual Market Value (AMV) - these figures are the same as your exercise price.
If you are revenue-making, then please enter at least three years worth of accounts (if you've been trading that long). Your last set of accounts cannot be more than 9 months old, so if that is the case, please enter your management accounts as well.
Also enter your net assets from a Balance Sheet within the last month. If you’ve recently done a funding round, make sure your Balance Sheet is from after the close of the round.
If you are pre-revenue - Just select that you are pre-revenue and it removes the requirement to add certain financial information.
Step 5: Viewing your valuation report
Once you have completed your valuation report, you will now be able to view the document. Scroll down to Clause 7 where you will be shown your UMV & AMV - this is the figure that will be your exercise price. You should copy the AMV, because you will need to enter it in your valuation details (see step directly below).
Step 6: Filling out your valuation details
Here, you will answer a few more simple questions which will then auto populate your HMRC VAL 231 form.
For the question, Have any shares been allotted since the date of the last company accounts? please look at the date of your last accounts on Companies House and enter the details of any shares allotted since then
For the question, Have any shares in the company been bought or sold within the last year? this refers ONLY to share transfers - not funding rounds or share allotments.
Step 7: Creating your VAL 231 form
Create, sign and download your VAL 231 and Cover Letter and download your valuation report.
Step 8: Valuation review by someone from the Options team
Once you have completed the above, it is time to get your valuation reviewed by someone from the Options team. Please send your application to [email protected].
Step 9: Sending your valuation to HMRC
The final step is to email the relevant information to HMRC.
Send your: valuation report; VAL 231 Form; Cover Letter; and Balance Sheet to HMRC at [email protected]. They will reply by post in about 4 weeks, so keep an eye out for it.
You can download your valuation report, VAL231 Form and cover letter on the valuation homepage, just click 'View' next to each document, once the doc is opened click the 3 dots in the top right corner to download. Please note: Your balance sheet should be on your personal computer as we do not store this document on the platform, don't forget to attach it in your email too!