An introduction to Enterprise Management Incentive options for corporate lawyers
Produced in partnership with Dilpa Raval of CMS and Graham Muir of CMS
An introduction to Enterprise Management Incentive options for corporate lawyers

The following Corporate practice note Produced in partnership with Dilpa Raval of CMS and Graham Muir of CMS provides comprehensive and up to date legal information covering:

  • An introduction to Enterprise Management Incentive options for corporate lawyers
  • The form and purpose of EMI options
  • EMI option limits
  • Individual limit
  • EMI Company limit
  • Qualifying conditions: the EMI Company
  • Independent company
  • Qualifying subsidiaries
  • Value of gross assets
  • Number of employees
  • More...

This Practice Note focuses on the conditions that have to be satisfied in order for Enterprise Management Incentive (EMI) options to be granted and summarises the tax benefits of EMI options.

EMI options were introduced in the Finance Act 2000 and are intended to assist smaller high-risk companies to recruit and retain employees of high calibre. In broad terms, EMI options aim to do this by providing a number of significant tax reliefs for employees in companies which satisfy the qualifying conditions set out in Schedule 5 to the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003).

With effect from 6 April 2014, companies are required to register their EMI plans online and self-certify that the statutory conditions are satisfied (see Self-certification of EMI options below).

This Practice Note is intended to be a summary of the issues relevant to corporate lawyers. If further details are required, the advice of a share incentives specialist should be sought.

The form and purpose of EMI options

EMI options are a form of share option over a company's shares (the EMI Company). This means that they give the holder of the option the right to call for the shares subject to the option at a future date but at a price (the option price) determined at the date of grant. To acquire the shares, the holder of the EMI option must exercise

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