Tax incentives offered by the government have increased the popularity of employee share plans in recent years.
In the case of private companies, implementing an employee share plan can impose onerous responsibilities on management. For example, a very detailed prospectus or disclosure statement may need to be prepared to present to employees to explain the nature of the share offer.
A variety of matters should be addressed at the outset. These include reviewing the implications for existing owners in sharing ownership with staff members as well as planning ahead for what happens to the shares when the employee leaves, as examples.
Clinch Long Letherbarrow are experienced in assisting employers and employees with issues arising with the establishment and ongoing management of an employee share plan.
Ensuring the scheme is structured correctly with clearly understood terms and conditions in place is vitally important.