Your Enterprise Management Incentive Scheme

Don’t get caught out and unintentionally disqualify your Enterprise Management Incentive (EMI) share scheme.

If you think that any of the following issues may arise in your Company, please contact us immediately and where possible before any changes are made.

To continue to qualify for EMI, the Company must ensure:

Independence – A company whose shares are subject to EMI options must not be:

A 51 per cent subsidiary (more than 50 per cent of its ordinary share capital owned by another company), or

  • Controlled by another company (or another company and persons connected with it)
  • Arrangements must not exist which could result in the company becoming a 51 per cent subsidiary or otherwise being controlled by another company.

Articles of Association – Changing the company’s Articles of Association and other governing documents can also have an adverse effect on the eligibility of your EMI plan.

Gross assets – The value of the company’s gross assets must not exceed £30 million at the date the EMI option is granted. If the company is a member of a group of companies, the limits are applied to the gross assets of the group as a whole.

Trading activities – A qualifying trade is a trade on a commercial, profit-making basis, and which does not, to any substantial extent, include certain excluded trading activities. The qualifying company must also have a permanent establishment in the UK. If the trading activity of the Company and/or the location of the Company changes, please contact us.

Number of employees – A company must have fewer than 250 employees (full-time equivalent) in order to grant EMI options.

Participant Eligibility

  • An eligible participant is an employee who works at least 25 hours a week for the Company or spends 75% or their total working time employed by the Company.
  • Shareholders holding 30% or more equity in the Company at the date of the grant cannot be awarded options under the EMI (or those connected to them – e.g. Spouse, Parent, Child).

Maximum entitlements

  • No employee may hold unexercised qualifying EMI options with an unrestricted market value of more than £250,000 (as at the date of grant). This limit is calculated using the agreed unrestricted market value of the shares at the date of grant.
  • Any number of employees may hold EMI options in a company or group, subject to a maximum of £3million as the total value of shares under EMI option in a company.

If you have any queries about and EMI share plan you have in place, or are thinking of putting one in place, give us a call on 0208 949 5522 or email us at