Blog

The potential pitfalls of referring to employee share option plans in employment offers and contracts and how to do so safely

What are employee share option plans and why would you implement them?

Employee share options provide employees with rights to acquire shares in a company (usually the employing company or a member of the same group) at a pre-agreed fixed price (often called the exercise price or strike price) in the future. Normally, the exercise price is the market value of the shares at the time the option is granted.

For example, an employee could be granted an option to buy 100 shares at a price of £1.00 per share.

Read More »


Our Top 5 Recommendations For EMI Share Option Schemes

Top 5 Tips for EMI Options

1)      Separate generic scheme rules (that apply to everyone, e.g. when options lapse on leaving the company before options vested) and then bespoke option certificates that include details specific to each option holder such as exercise conditions (for example every year of employment or with reference to company turnover target or individual metrics such as sales targets).

Read More »

What are unapproved / non-tax advantaged share option schemes and how are they used?

An unapproved share option scheme (which is now increasingly referred to as a non-tax advantaged share option scheme) provides the right, but not obligation to acquire a given number of shares from a company at a future date for a fixed price.

For the purposes of this article, we will continue to refer to these schemes as “unapproved” schemes because this is how many people still refer to them. Many industrial professionals, however, have adopted the term “non-tax advantaged” in place of “unapproved”.

Read More »

Changes to HMRC SEIS/EIS Guidance for Film and TV Companies

HMRC updated its Venture Capital Schemes Manual VCM8560 on 15 March 2021.

The update is regarding Example 3 of VCM8560 which presents an example of a qualifying film company.

The new guidance provides further clarity on how the risk-to-capital condition applies to Film and TV production companies that are seeking SEIS/EIS advance assurance approval.

Read More »

A Guide to Convertible Loan Notes

Convertible Loan Notes (“CLN”) are loan notes which grant the holder a right to subscribe or convert the loan amount into shares in the relevant company. We will explore the potential benefits and drawbacks of using CLNs in more detail below, but they are often used as a form of bridging facility by start-up companies ahead of a future round of venture capital financing.

Where an investor invests in a company via a CLN, unlike a venture capital investment where equity is issued up-front, the investment amount will be treated as a loan to the company and (subject to the terms of the CLN) there will be an option or right to convert that amount into shares in the company at a later point in time. Another key difference when investing via a CLN as opposed to venture capital, is that the share price and most likely the class of share will not be known at the date of the investment.

Read More »


Employee Guidance Where Employers Demand Covid-19 Vaccination

The United Kingdom Medical Freedom Alliance (UKMFA), Lawyers for Liberty and The Workers Union of England have published an open letter to employers who are demanding Covid-19 Vaccination of Employees. Employees and potential employees are able to share this letter with employers who are proposing to mandate Covid-19 vaccines on their employees.

Read More »

Can an investment be EIS qualifying if a company acquires intellectual property and/or generates revenue from royalties?

Can an investment be EIS qualifying if a company acquires intellectual property and/or generates revenue from royalties?

The Enterprise Investment Scheme (EIS) is an attractive option to those wishing to grow their business and attract the attention of investors (by offering tax reliefs to those who invest).

Read More »

How to execute an agreement in the cloud?

With exceptional physical distancing requirements in place during Covid-19, witnessing a legal document has been proven very difficult if not almost impossible. Here, at The Jonathan Lea Network we are always looking for ways we can overcome any challenges and improve the service we offer our clients and therefore we’re pleased to announce that from today The Jonathan Lea Network can offer DocuSign eWitness electronic signing to our clients.

Read More »