Unapproved share option scheme
Share equity with no restrictions
✔️ Grant options to anyone, anywhere
✔️ Automate the legal docs
✔️ Unlimited expert support
companies use SeedLegals
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
Incentivise your staff
Get help from experts
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
Tripartite agreement - coming soon 2023
Want to offer options from your own shares?
Tripartite agreements allow you to allocate options against your personal shares (or someone else’s) so you can grant options without diluting other shareholders.
- Grant options to employees from your own equity
- Add on to your option scheme
- Ask us for help with tripartite grants - coming soon
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
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
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
More resources on Unapproved option schemes
Frequently asked questions about Unapproved share option schemes
What are the advantages of an Unapproved share option scheme?Unlike an EMI scheme, 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?
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?
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?
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.
To find out more about Unapproved option schemes, read our post: What are 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?
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
- 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, read our post: How to set up an Unapproved scheme on SeedLegals
To get started, log in or register 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?
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:
- No tax liability when they’re granted options
- Income Taxwhen they exercise options
- Capital Gains Tax when they sell the shares
For your company:
- Employer’s National Insurance Contribution
When an employee exercises their Unapproved share options, 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. The shares are only considered to be ‘readily convertible’ if your company is public, or about to be sold with an arrangement in place to buy the shares.
- 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
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 anytime to set up your option scheme. To see how it works, book a demo.
To create your scheme, issue option grants and maintain your scheme going forward, you’ll need to be a SeedLegals member - choose either Plus or Standard.
To set up an option scheme on SeedLegals, do I need to be a member?Yes. To create your scheme, issue option grants and maintain your scheme going forward, you’ll need to be a SeedLegals member - choose either Plus or Standard.
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
Help, my question isn’t answered here!No problem - hit the chat button (bottom right of your screen) to ask our options experts 🙂
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