Assynt Corporate Finance, a member of The Corporate Finance Network in Hertfordshire, has advised manufacturing business on an EMI Share Option Scheme.
Andrew Watkin, a business adviser at Assynt Corporate Finance was asked by his client for assistance when he wanted to sell his business via a Management Buy-Out or trade sale to a strategic acquirer.
Ahead of the company sale, the owner wanted to reward an employee for their dedication to the business and who had added significant value, however was not a shareholder.
Various options were considered and it was decided that an Enterprise Management Incentive (EMI) Share Option was the best route to take. Andrew arranged for solicitors to draw up the relevant paperwork, discussed the implications of the clauses with the owner, drafted a business valuation and submitted an appropriate advance clearance application to HMRC.
The valuation was agreed with HMRC without any changes. The solicitors finalised the documents and arranged for these to be signed by the owner and employee.
The creation of the scheme for the employee provides him with a reasonable capital sum when the owner eventually exits the business to pursue other activities.
The company will obtain a tax deduction when the options are exercised so all parties gain from the EMI scheme being establsihed.