--- title: "Share Option Scheme" id: "297" type: "products" slug: "share-options-scheme" published_at: "2019-10-14T08:44:09+00:00" modified_at: "2026-09-24T11:54:18+00:00" url: "https://seedlegals.com/grow/share-options-scheme/" markdown_url: "https://seedlegals.com/grow/share-options-scheme.md" --- - [Grow](https://seedlegals.com/grow/) Share Option Scheme [R&D Tax Credit Claims](https://seedlegals.com/grow/rd-tax-credit-claim/) # Employee share option schemes ## Reward your team with equity Keep talent onboard and engaged for your startup’s journey. On SeedLegals, it’s easy to create and manage an [employee share option scheme](https://seedlegals.com/resources/employee-share-options-explained/) tailored to your business. Not sure where to begin? Our guide explains [what a share incentive plan is](https://seedlegals.com/resources/share-incentive-plans-explained/) and how it can help you reward and retain your team. [Talk to an expert](https://seedlegals.com/talk-to-an-expert/) [Start free](https://app.seedlegals.com/signup) [Trustpilot](https://uk.trustpilot.com/review/www.seedlegals.com%20) ###### Launch a share option scheme ## The secret weapon to incentivise your team Take a quick tour of SeedLegals option schemes. Our CEO Anthony Rose explains how to use share options as an incentive, how to set up your scheme and why you want a low company valuation from HMRC. Bonus: see how your option holders can log in to view their options and calculate how much they might be worth. ###### Simple employee equity compensation ## The easiest way to set up an option scheme Create your option scheme on SeedLegals in just a few clicks, with support from your dedicated options expert. - ##### EMI Valuation Our [EMI Valuation](https://seedlegals.com/grow/share-options-scheme/emi-valuation/) tool helps you secure a low price for EMI options for your team. - ##### EMI Share Option Scheme An [EMI scheme](https://seedlegals.com/grow/share-options-scheme/emi-option-schemes/) is the most tax efficient way to give equity to your employees. - ##### Unapproved Option Scheme An [Unapproved scheme](https://seedlegals.com/grow/share-options-scheme/unapproved/) is best way to give equity to contractors and consultants. ###### Design your employee share scheme ## Fast-track your scheme Employee share schemes used to be a headache. Now they’re fast and foolproof. Just build your scheme using our tried-and-tested templated terms. We’ll check the details, create the rest of the docs and guide you through every step. - Get the best-possible EMI valuation approved - Choose rules for option allocation, vesting and exercise - Review your scheme with a specialist ###### Full oversight for you and your team ## Put your option plan on autopilot And relax. After you’ve set up your scheme on SeedLegals, it practically runs itself. Plus, your team has their own dashboard to track and manage their options. - View total options issued and exercised, at a glance - Add new joiners anytime and issue option grants instantly - Get notifications for important deadlines, like the EMI annual return - Your team can view their options and check what they’re worth using the options calculator ###### Expert support with your share scheme ## Chat online anytime with our experts Need some help? Not sure if you’re EMI eligible or what strike price to set? You’ll find plenty of built-in tutorials and step-by-step guidance. And when you need extra support, our expert team is just a click or a call away. - Talk to us via chat, phone, email or video call - End-to-end help included - no extra cost - Ask us anything - we're here 9am to 6pm Monday to Friday ## How to set up a share option scheme - #### Log in or register It takes less than 3 minutes to create your SeedLegals account - #### Create option pool Set aside a slice of equity to share with your team. Not sure where to begin? Read our guide to creating a [share option pool](https://seedlegals.com/resources/share-option-pool/) and deciding how much equity to set aside. - #### Set scheme rules Choose your [vesting schedule](https://seedlegals.com/resources/choosing-the-right-vesting-schedule-for-your-share-options/) and decide when your team’s options can be exercised - #### Get an expert review We’ll go through everything in your scheme, so you can be confident it’s right for you and your team - #### Pass board resolution It’s quick to get everything signed and sealed on SeedLegals - #### Agree valuation with HMRC For EMI schemes only: submit a share valuation for prior approval - #### Grant options Add your team members and their allocation. Send out grants in just one click - #### Ask if you need help If you get stuck at any point, hit chat to message an expert [#!](#!) [#!](#!) [https://seedlegals.com/ebooks/share-options-guide/](https://seedlegals.com/ebooks/share-options-guide/) [Download your free guide to share option schemes](https://seedlegals.com/ebooks/share-options-guide/) [https://seedlegals.com/resources/share-options-explained/](https://seedlegals.com/resources/share-options-explained/) [Share options explained: the essential guide for UK startups](https://seedlegals.com/resources/share-options-explained/) [https://seedlegals.com/resources/what-is-an-emi-scheme/](https://seedlegals.com/resources/what-is-an-emi-scheme/) [What is an EMI scheme? EMI share options explained](https://seedlegals.com/resources/what-is-an-emi-scheme/) [https://seedlegals.com/resources/unapproved-share-options/](https://seedlegals.com/resources/unapproved-share-options/) [What are Unapproved share options?](https://seedlegals.com/resources/unapproved-share-options/) [https://seedlegals.com/resources/performance-options/](https://seedlegals.com/resources/performance-options/) [How to allocate share options based on performance](https://seedlegals.com/resources/performance-options/) [https://seedlegals.com/customers/sweet-analytics-raises-1-4m-using-flexible-top-ups/#:~:text=3.%20Offering%20employees%20share%20options%20in%20a%20few%20clicks](https://seedlegals.com/customers/sweet-analytics-raises-1-4m-using-flexible-top-ups/#:~:text=3.%20Offering%20employees%20share%20options%20in%20a%20few%20clicks) [How Sweet Analytics granted their employees share options in a few clicks](https://seedlegals.com/customers/sweet-analytics-raises-1-4m-using-flexible-top-ups/#:~:text=3.%20Offering%20employees%20share%20options%20in%20a%20few%20clicks) ## FAQs Frequently asked questions about share option schemes - What is an employee share option scheme? Employee share option schemes are a way to incentivise and reward your team for their hard work. When you create a share option scheme or plan, you create the rules and conditions under which your team members can earn options. Options give your team the right to buy shares in your company in the future at a pre-agreed price (the ‘strike’ price). There are many reasons why companies choose to reward their team with equity via shares options and not shares. You can find full details in [shares vs options: what’s the difference?](https://seedlegals.com/resources/shares-vs-options-whats-the-difference/) - Why do companies give employees equity? When employees hold equity in the company they work for, their interests are directly tied to the company’s. When the company does well and its share price increases, so do the value of the employee’s shares. It gives the employee a personal stake in the company - and a reason to stay as the company grows. Equity compensation is a way to **motivate** employees, **retain and nurture talent** and **reward** top performers. Not sure how much to offer? See the typical [equity range for startup employees](https://seedlegals.com/resources/how-much-equity-should-uk-startups-give-employees/) . - How do I set up an employee share option scheme? On SeedLegals it’s easy - and we’ll help you at every step. First, decide whether you need an EMI scheme or an Unapproved scheme (see below). The exact steps will depend on the scheme you choose. In general, to set up a scheme on SeedLegals, you need to: - Create your [option pool](https://help.seedlegals.com/en/articles/4479668-how-to-create-an-option-pool) - Create your option scheme - Choose vesting and exercise rules - Pass a board resolution to adopt the option scheme - Grant the options - Enter your team members’ details and details of the option grant - Send out the option agreements to your team for signatures For more information, see [how to set up an Unapproved scheme on SeedLegals](https://help.seedlegals.com/en/5173924-unapproved-share-option-scheme-step-by-step-guide-to-setting-up-your-scheme) or [how to set up an EMI scheme on SeedLegals](https://help.seedlegals.com/en/2291832-step-by-step-guide-to-creating-an-emi-options-scheme) . To get started, [log in or register](https://app.seedlegals.com/login?_ga=2.194956717.1640282817.1656319889-666922775.1644850580&_gac=1.113305077.1655366654.CjwKCAjwqauVBhBGEiwAXOepkSvoCutE6TK7KxD8yeoPr4ydqEIv-3q1J9UNc9bXcPfCHBD1Rq14XhoCnY4QAvD_BwE) and go to Share Options. There’s built-in guidance but if you need any help, hit the chat button to message our experts. - What are the different types of employee share option schemes? On SeedLegals you can create two types of employee share option scheme: EMI and Unapproved. The **EMI scheme** is more tax-efficient for both your company and your team members, but you can only offer EMI options to your full-time, UK-based employees. Because it’s ‘approved’ by HMRC, there are various criteria the company and the employee must meet to be eligible. You can see those criteria in detail in our [EMI share options explained](https://seedlegals.com/resources/what-is-an-emi-scheme/) article. It requires more effort and admin to set up an EMI scheme, because you have to submit a company valuation to HMRC *before* you grant any options. This sets the strike price your team members pay to exercise their options. On SeedLegals, you can buy access to our EMI Valuation report tool as an optional extra, which helps get you the best possible price. You also need to notify HMRC *after* you’ve granted options as well as sending an annual report. If you create your EMI scheme with SeedLegals, we’ll help you at every stage of this process. The **Unapproved scheme** is so-called because it doesn’t require HMRC approval. This makes the Unapproved scheme less tax efficient - but much more flexible. Through an Unapproved scheme, you can grant options to a greater number of team members, including consultants, advisors, contractors and your international staff. Working out what to offer an advisor? Read our guide to [advisory shares and how much equity to give](https://seedlegals.com/resources/how-much-equity-should-i-give-an-advisor/) . Many companies have both an EMI and an Unapproved option scheme to cover different categories of team members. Options aren’t the only choice. Find out how [growth shares](https://seedlegals.com/resources/growth-shares/) work and when they might suit your business. For more detail about these two types of option schemes, see this [EMI or Unapproved](https://seedlegals.com/resources/emi-or-unapproved-share-option-scheme-which-is-best-for-you/) article. - What are the tax implications of setting up an employee option scheme? **EMI share option scheme** **For your team** - No tax liability on grant - Usually no tax liability on exercise - When the employee sells their shares, they can usually use Business Asset Disposal Relief sooner and pay a lower rate of Capital Gains Tax **For your company** - No NIC due when the options are exercised - Possibility of a Corporation Tax deduction when the options are exercised **Unapproved share option scheme** **For your team** - No tax liability on grant for employees and directors - Tax on exercise - Tax on sale **For your company** - Possibility of a Corporation Tax deduction when the options are exercised Tax, as ever, is a complicated area. For more detail, see our article on [option scheme tax implications](https://seedlegals.com/resources/option-schemes-tax-implications/) . Please note that we aren’t authorised to provide personalised tax advice, so we suggest you consult an accountant for specific queries. - What is the options calculator and how does it work? The SeedLegals Options Dashboard makes it easy for your team to understand the value of their options. When you share the Option Agreement with a team member, they will get an invitation and a link to create their own SeedLegals account. On the dashboard, they will see the vesting status of their allocation, their Option Agreement, Option Certificate and Share Certificate (after they have exercised their options). As well as this, they will have access to the Options Calculator. This helps answer two common questions: the potential value of their options based on a given valuation, and how much it would cost to exercise a given number of their vested options. For more information about this helpful tool, see our article on the [Options Dashboard and Calculator](https://help.seedlegals.com/en/articles/5441582-seedlegals-options-dashboard-lets-your-employees-track-and-manage-their-options) . - Is SeedLegals FCA authorised? Does my option scheme provider need to be FCA regulated? We don't require FCA authorisation to provide you with customisable option schemes and grant agreements. This is because we don't hold any assets for you or your option holders. When your option holders exercise their options (to convert them into shares), they pay your company directly - this payment does not go via SeedLegals, and your option holders become shareholders outright. The FCA ([Financial Conduct Authority](https://www.fca.org.uk/about/) ) regulates financial services providers such as banks, building societies, payments providers and insurers. Companies and individuals must be authorised or registered by the FCA to carry out certain activities in the UK - for example, holding money in bank accounts, giving financial advice, offering loans or mortgages and so on. Although we aren’t regulated by the FCA, we hold ourselves to the same high standards the FCA expects of the companies they regulate. For example: - we are honest, fair and effective so you get a fair deal - we conduct our business with integrity, skill, care and diligence - our communications are fair, clear and not misleading View the full list at the FCA website: [Principles for businesses](https://www.fca.org.uk/about/how-we-regulate/handbook/principles-good-regulation) ## You’re in safe hands Our team of legal and funding experts have helped thousands of entrepreneurs raise money and grow their businesses. - ##### Beautifully organised Your company's core agreements, all in one place - ##### Secure signatures Share and collect signatures online via SeedLegals - ##### Backed by real lawyers Create the exact documents you need at every stage of growth - ##### Serious about security Your information stays safe and confidential in our secure system - ##### Helpful humans Talk to one of our friendly team anytime on live chat - ##### Extra protection Don't worry, our insurance covers claims related to our platform ## We’ve helped over 60,000 companies From food to FinTech and beyond, join thousands of startups who use SeedLegals to start, raise and grow faster. - - - - - - [More customer stories](/customers/) - The reality is you’re on a journey; fundraising is so much about the narrative. SeedLegals allows you to tell the right story at the right time with the right legal documents for different types of investors. ##### Louise Doherty Founder & CEO, Yoller - SeedLegals held our hand through complex investor negotiations and even picked up on some errors produced by our previous lawyers which were a well-known City law firm! ##### Alex Templeton Founder & CEO, Qured - One of the great things about SeedLegals is that it is designed to be appropriate for the round and the stage of the business. They keep it simple. It feels like they really understand that. ##### Alex Rainey Co-founder & CEO, Pluto - How do I get all the businesses I invest in to use SeedLegals? ##### Alexander Wyndham Angel Investor , The Family - It's easy to forget about the legal side of things but SeedLegals make things really easy to understand. The team at SeedLegals are truly amazing. ##### Darren Tenkorang Founder, TRIM-IT - There’s an opportunity to reach a specialist advisor via chat, phone and email to check in on anything. The SeedLegals team were extremely responsive – really amazing. ##### Emilie Vanpoperinghe Co-Founder, OddBox - - - - - -