--- title: "Unapproved Option Schemes" id: "44007" type: "products" slug: "unapproved" published_at: "2023-04-17T09:50:10+00:00" modified_at: "2025-11-26T13:11:41+00:00" url: "https://seedlegals.com/grow/share-options-scheme/unapproved/" markdown_url: "https://seedlegals.com/grow/share-options-scheme/unapproved.md" --- - [Share Option Scheme](https://seedlegals.com/grow/share-options-scheme/) Unapproved Option Schemes [EMI Valuation](https://seedlegals.com/grow/share-options-scheme/emi-valuation/) # Unapproved share option scheme ## Share equity with no restrictions ✔️ Grant options to anyone, anywhere ✔️ Automate the legal docs ✔️ Unlimited expert support [Talk to an expert](https://seedlegals.com/talk-to-an-expert/) [Start free](https://app.seedlegals.com/signup) [4.9 out of five star rating on Trustpilot](https://uk.trustpilot.com/review/www.seedlegals.com?utm_medium=trustbox&utm_source=Horizontal) [Trustpilot](https://uk.trustpilot.com/review/www.seedlegals.com?utm_medium=trustbox&utm_source=Horizontal) - ## 60,000+ companies use SeedLegals - ## 2,500+ options schemes on SeedLegals - ## up to 4 x lower price than lawyers and accountants ## Unapproved options: unlimited and unapologetically awesome Our option schemes are designed and regularly reviewed by lawyers. #### Offer options for all Employees, contractors, advisors, non-UK staff - anyone. There are no restrictions on who you can grant options to. #### Incentivise your staff Attract the best candidates with an option scheme. Holders can log in to view their options and see what they might be worth. #### Boost efficiency Create, customise and run your Unapproved scheme on SeedLegals to automate the documents and eliminate errors. #### Get help from experts Our friendly, 5-star options team is ready to guide you. Make the most of their expert knowledge. ###### Share scheme for non-PAYE staff ## Build a scheme without EMI restrictions If you or your staff don’t fit the criteria for a tax-advantaged EMI scheme, build your own Unapproved scheme on SeedLegals. (And yes, you can have an EMI scheme *and* an Unapproved scheme.) - Any size company - Any employee, freelancer, adviser etc - Any amount of options ###### Share options for overseas staff and advisors ## Offer options to overseas staff, non-PAYE workers and more Only PAYE staff can get EMI share options. With an Unapproved scheme, you can share equity with more of your team. - Contractors, consultants and freelancers - Overseas staff - Advisors, mentors, family - anyone! ###### Administration tools for Unapproved option scheme ## The easy way to create and run your Unapproved scheme Generate all the legal documents automatically. Need some help? Our options experts review your scheme and are on hand when you have questions. - Build, customise and manage your scheme - Sign and store all documents on SeedLegals - Add new joiners anytime, issue option grants instantly ###### Dashboard for option holders ## Give your team the tools to manage their options Our easy-to-use dashboard for option holders is included in your membership. Your team can log in themselves to track vesting and see what their options might be worth. - Keep your team motivated and engaged - Saves time for you (because they can find the answers themselves) - For options holders: track vesting - For options holders: use the calculator to see what options would be worth for any valuation ###### Expert support for your option scheme ## Chat online with our experts Need some help? Not sure if you need an EMI or Unapproved scheme (or both)? Our expert team is just a click or a call away. - Unlimited support included, no extra cost - Talk to us via chat, phone, email or video call - Ask us anything - we're here 9am to 6pm Monday to Friday ## How to set up an Unapproved share option scheme - #### Log in or register It takes less than 3 minutes to [create your SeedLegals account](https://app.seedlegals.com/signup/) - #### Create the option pool Set aside a slice of equity to share with your team - #### Set scheme rules Choose how your team's options will vest and when they can be exercised - #### Get an expert review We check everything in your scheme so you can be confident it’s right for you and your team - #### Pass board resolution Get approval from your directors to run the option scheme - #### Grant options Add the option holder and their allocation, share their grant via SeedLegals - #### Ask if you need help Hit the chat button or call our experts [#!](#!) [#!](#!) [https://seedlegals.com/ebooks/share-options-guide/](https://seedlegals.com/ebooks/share-options-guide/) [Free ebook: The founder's guide to share option schemes](https://seedlegals.com/ebooks/share-options-guide/) [https://seedlegals.com/resources/share-option-schemes-uk-report/](https://seedlegals.com/resources/share-option-schemes-uk-report/) [UK report 2024: How does your share option scheme compare?](https://seedlegals.com/resources/share-option-schemes-uk-report/) [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/) ## FAQs Frequently asked questions about Unapproved share option schemes - What are the advantages of an Unapproved share option scheme? Unlike an [EMI scheme](https://seedlegals.com/grow/share-options-scheme/emi-option-schemes/) , an Unapproved scheme has no restrictions. There’s no limit on how many employees you have, or how much equity you give in options, and you can grant options to team members who don’t qualify for other types of options, such as EMI. For more about the advantages of Unapproved share options, read our post: [What are Unapproved share options?](https://seedlegals.com/resources/unapproved-share-options/) - Can I give share options to my overseas staff? Yes - with an Unapproved share option scheme, you can grant options to your team overseas. For overseas workers, the tax implications for being granted and exercising options, and for selling shares, vary depending on where they are tax resident. For more about who you can grant Unapproved options to, read our post: [What are Unapproved share options?](https://seedlegals.com/resources/unapproved-share-options/) - Can I give share options to freelancers and contractors? Yes - with an Unapproved share option scheme, you can grant options to non-PAYE staff including freelancers, contractors, consultants and advisors. For more about who you can grant Unapproved options to, read our post: [What are Unapproved share options?](https://seedlegals.com/resources/unapproved-share-options/) - What is a non-EMI option scheme? There are several ways to organise a share option scheme to share equity with your team. Any scheme which isn’t an EMI (Enterprise Management Incentive) scheme is a non-EMI option scheme. Many UK startups set up an EMI (Enterprise Management Incentive) scheme because these come with the most tax advantages. But if a company and/or staff aren’t eligible for EMI options, then the company might set up a non-EMI scheme instead. At SeedLegals, we offer the type of non-EMI scheme most commonly chosen by startups: **Unapproved**. To find out more about different types of equity sharing plans which are approved for tax advantages by HMRC, visit the [gov.uk website](https://www.gov.uk/tax-employee-share-schemes) . To find out more about Unapproved option schemes, read our post: [What are Unapproved share options?](https://seedlegals.com/resources/unapproved-share-options/) - What type of option scheme do I need? Unapproved or EMI? There are two types of option schemes that are most suitable for UK startups: EMI and Unapproved. To read more about how to decide which scheme is right for your company, read our post: [EMI or Unapproved Share Option Scheme?](https://seedlegals.com/resources/emi-or-unapproved-share-option-scheme-which-is-best-for-you/) - How do I set up an Unapproved share option scheme on SeedLegals? It’s easy - and we’re here to help at every step. - [Create your option pool](https://help.seedlegals.com/en/articles/4479668-how-to-create-an-option-pool) - [Create your option scheme](https://help.seedlegals.com/en/5173924-unapproved-share-option-scheme-step-by-step-guide-to-setting-up-your-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, read our post: [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/) To get started, [log in or register](https://app.seedlegals.com/login/) 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 is an Unapproved share option scheme? Does ‘unapproved’ mean it isn’t allowed? Unapproved means that the options you grant from this scheme aren’t tax advantaged. We also offer Enterprise Management Incentive (EMI) share option schemes, which are approved. ‘Approved’ here means that the scheme has been signed off by HMRC for a generous set of tax perks – both for the company granting the options, and the employees who receive them. But not all companies or staff are eligible for EMI options. And that’s when you might want to offer Unapproved options. We’ve explained more in our post: [What are Unapproved share options?](https://seedlegals.com/resources/unapproved-share-options/) - Do I need to get a company valuation to set up an Unapproved scheme? No. Because Unapproved schemes don’t come with tax advantages, you don’t need to get your company valued to set up this type of scheme. - What are the tax implications of setting up an Unapproved option scheme? For your team: - Income Tax when they’re granted options - **Income Tax** when they exercise options - **Capital Gains Tax** when they sell the shares There can be other Income or Capital Gains tax charges, depending on the terms of a given option. If your option holders are resident overseas, they’ll be subject to the tax laws of their own country and should get independent tax advice from a specialist. For your company: - **Employer’s National Insurance Contribution** When there is Income Tax to pay, your company is liable for NIC if the shares the employee acquires are a Readily Convertible Asset (RCA). An RCA is a type of asset that’s treated as if it were cash for calculating Income Tax. - **Corporation Tax deduction** If you’ve granted Unapproved options to employees on your company payroll, you can claim a Corporation Tax deduction equal to the Income Tax charge the option holder pays (depending on your situation) For more detail, read our post: [Tax implications of share option schemes](https://seedlegals.com/resources/option-schemes-tax-implications/) Before making decisions, we recommend you consult your accountant or tax advisor. - Do I need to be an existing SeedLegals member to set up an option scheme? No - you can [join SeedLegals](https://app.seedlegals.com/login) anytime to set up your option scheme. To see how it works, [book a demo](https://seedlegals.com/talk-to-an-expert/) . To create your scheme, issue option grants and maintain your scheme going forward, you’ll need a [SeedLegals Options Subscription](https://seedlegals.com/pricing/) . - To set up an option scheme on SeedLegals, do I need a subscription? Yes, to create your scheme, issue option grants and maintain your scheme going forward, you’ll need a [SeedLegals Options Subscription](https://seedlegals.com/pricing/) - What is the share options calculator and how does it work? Your option holders can log into SeedLegals to see the vesting and value of their options. When you share the Option Agreement with a team member, they get an invitation with a link to create their own SeedLegals account. On their dashboard, the option holders can: - see the vesting status of their allocation - view their documents: - Option Agreement - Option Certificate - Share Certificate (after they exercise options) - use the options calculator The calculator helps answer two common questions: how much are their options worth based on a specified valuation (they can type in any valuation to model different scenarios), and how much it would cost to exercise a given number of their vested options. Read more and see how the dashboard looks in our post: [Track and manage your options](https://help.seedlegals.com/en/articles/5441582-seedlegals-options-dashboard-lets-your-employees-track-and-manage-their-options?_ga=2.231846427.581907165.1679656547-1078452295.1679656547) - Help, my question isn’t answered here! No problem - hit the chat button (bottom right of your screen) to ask our options experts 🙂 ## 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 - - - - - -