Employee Shareholder Advice

With effect from 1 September 2013, the Government introduced a new employment status, referred to as ‘employee shareholder’ status.  This is a tax efficient way for employees to share in the growth and success of their employers.

Individuals accepting employee shareholder status will give up certain employment rights in return for shares in their employer or its parent which benefit from exemptions from capital gains tax (CGT).

The legal requirements regarding this new employment status are relatively complex and there are strict rules regarding how employee shareholder status should be implemented. These rules include a requirement that those individuals receive independent legal advice at the company’s expense.

As such, it is vital for companies and prospective employee shareholders alike that the relevant corporate, tax and employment law requirements are complied with to avoid complex and costly problems later on.

Teacher Stern is one of the leading advisors in the UK on employee shareholder mattes having advised on a large percentage of the schemes put in place in the UK.

We can advise both companies and individuals who are considering employee shareholder status on the implications of employee shareholder status for them and assist in any negotiation of the terms of an employee shareholder agreement. On employee shareholder matters, we work closely with members of our corporate team who regularly draft and advise on the constitutional and corporate documents necessary to create the employee shareholder structure and issue shares to employee shareholders.

Representative Employee Shareholder Advice Work

Examples of our employment team’s employee shareholder work include:

  • Advised 40 senior employees in a large multinational on the terms on which they were offered the opportunity to become employee shareholders of their employer.
  • Advised numerous senior management teams of companies acquired by private equity firms on offers of employee shareholder status.
  • Working alongside City law firms who regularly recommend us to provide independent statutory advice to employees of their clients on employee shareholder matters.

Key contacts:

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