While the Employee Share Scheme, also known as EMI (Enterprise Management Incentive) schemes are well known for tax benefits for both companies and employees, there are EMI scheme rules that every business should fully understand to remain compliant. EMI legislation has been updated and companies should take legal advice to ensure their circumstances comply with current EMI scheme rules and legislation. The Employee Share Scheme has benefits for both employers and employees As explained in our previous article, What are EMI Schemes?, the Employee Share Scheme is an excellent way for companies and their employees to receive certain tax reliefs,…

A shareholders agreement is a vital element of any arrangement that involves bringing shareholders into a business. As a legal document that outlines the rights, responsibilities and obligations of shareholders and the company, it is a mutually beneficial agreement protecting the business and the shareholders. It sets out the rules regarding the control of important decisions by the shareholders, the transfer of shares, non-compete obligations, confidentiality clauses and dispute resolution. At JPP Law we only provide bespoke shareholders agreements, but we understand why startups opt for the cheaper solution of a shareholders agreement template. In our view a good template,…

The UK is undoubtedly a good place to launch innovative technology. The UK has a goal to transform into a tech superpower by 2030 and is developing international partnerships across academia, government and industry to make this happen.  The UK is already ranked fourth in the Global Innovation Index for 2022 and ranked 12th in the 2022 Network Readiness Index, and it is renowned for a thriving tech ecosystem.   The “Flip Up”  This is why the UK has become an attractive option for foreign based tech startups to move their business to the UK via a “flip up”.  Flipping…

As a business owner preparing for a joint venture, you and your potential partner will need to decide how best to structure the business arrangement so that it provides the best platform for your mutual objectives. Several factors will influence your choice of legal structure for the deal, including the scope of the project, its likely duration, the level of risk, taxation and funding, as well as your respective negotiating positions. The decision whether or not to incorporate should be made very carefully. Key options The key choice will be whether or not to set up a new limited company…

In the UK, convertible loan notes have become a popular option for startups and early stage companies looking to raise finance. These are financial instruments that allow investors to lend money to a company in return for the option to convert that loan into equity at a later date.  When an investor buys a convertible loan note, they are, in essence, lending money to the business, but when certain conditions are met, that money can then be converted to equity or shares. Typically, this conversion occurs when the company satisfies certain conditions, such as a new funding round or an…

Enterprise Management Incentive Schemes ( EMI Schemes ), offer significant tax benefits for both companies and their employees by granting the right to shares in the company to employees in the most tax-efficient way (geared towards attracting and retaining employees).  Now the Government has brought in changes to the EMI qualifying conditions, aimed at simplifying the administration of these schemes.  Would your business qualify? Request the EMI Eligibility Questionnaire using the form at the bottom of this page. What has changed and what has JPP Law done to adapt?   Several important changes are now implemented in JPP Law’s Share Option…

Becoming a minority shareholder or investor in a business may lead you to believe that, given the limited rights you will have, there are not many important considerations to take into account. However, even a minority investor needs to protect their interests as much as possible and to be able to share or exit its investment in a fair manner. While minority shareholders may not usually benefit from voting rights, it is important to ensure they have access to drag along or tag along rights which provide them with a fair exit. All investors need to know what their rights…

Mergers can offer many benefits to two smaller partnerships with good cultural alignment, including sharing costs and resources, access to economies of scale, and reduction of competition. There are a host of commercial issues that one has to be aware of when contemplating a merger of two partnerships. An in-depth analysis of the two businesses is crucial, as is ensuring that required documentation is completed correctly. The process of merging will inevitably require many moving parts, and you'll be better served by having a knowledgeable legal team in your corner to help you address the commercial considerations. Commercial Considerations A…

Acquiring part of a business through the purchase of shares is one way to secure an investment. You may be contemplating a partial investment or an outright purchase of a business, either way the same considerations apply. Careful analysis of the target business is critical as there are a combination of commercial and personal factors which one needs to be aware of when investing via shares. It’s also essential to ensure the correct documentation is completed. Our advice is to research, review and risk assess. If you are in need of legal advice for a Shareholders Agreement book a free…

Did you know that employees received an estimated £480m in income tax and national insurance contributions (NIC) in the tax year ending 2021 from Employee Share Schemes - with EMI schemes forming the largest contributor to tax relief? EMI share schemes (Enterprise Management Incentives)  have clearly become a popular way of motivating, retaining and attracting employees in the UK, as they offer significant tax benefits for both the business and its employees. By allowing companies to grant options (the right to shares in the company) to qualifying employees in a tax efficient way, EMI option schemes are flexible and can…