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 post revenue - you must provide all financial details requested or else we can’t run the report (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 this number, 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.
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.
We will guide you throughout the valuation process but this is our final check to make sure your valuation application is good to go!
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!
Important actions to take after receiving your Valuation Approval from HMRC:
Great! You have received a response from HMRC approving your valuation. Here are your next steps:
1.) Finalise your Option Scheme Rules, create + sign your Board Resolution. To access the Option Scheme Rules and Board Resolution please click ‘Manage’ under the relevant scheme from your homepage, then click the arrow next to EMI Scheme.
This will take you to your Option Scheme page where you can edit the rules or edit the Board Resolution:
2.) Register your EMI Scheme with HMRC via its online service. Please follow these steps to do so. You must register your scheme with HMRC before you notify HMRC of any options granted to employees.
3.) Mark the valuation as approved on the platform, with the date it was approved. This can be done if you scroll right to the bottom of your valuation on the SeedLegals platform.
4.) Grant EMI options within 120 days* to lock in the agreed exercise price. Your valuation is only valid for 120 days*. If you want to grant additional options after it expires, you will need to submit a new valuation to HMRC. You can grant options right from the Option Scheme homepage:
*Please note that due to Coronavirus, any EMI Valuations that expire on or after 1 March 2020, and any new EMI Valuations created on or after 1 March 2020 can automatically be treated as having been extended by 30 days, so that they are valid for a total of 120 days. ( See HMRC Employment Related Securities Bulletin 35 (June 2020))
5.) Within 92 days of granting these options, you must notify HMRC of these option grants. See our guide on that here.
For other articles and help with your Options Scheme please see: