14/09/2023
Sometimes the planning we do is about making the best of a missed opportunity in a late-planned situation.
We have posted recently about the number and diversity of share option arrangements under design and implementation for our clients. All of these are powerful solutions, full of positive features and benefits.
However, ONE of our current assignments solves a need which might have been achieved more simply (and at next to no fee cost) if our client had had the time and opportunity to speak to us a couple of months earlier, prior to the acquisition of an established business into her Newco (which Newco was set up to take the business forward).
Knowing that she needed to award a material stake-holding to her prospective Operations Manager, our client might have set up her Newco vehicle in such a way as OM was already in shareholding prior to the business acquisition; this would have been at a time when there was clearly no value in Newco (no value which might otherwise have presented her OM with a risk of taxable Employment Income in the form of the "employment-related securities" to be issued or transferred to him).
A discussion with BHTA at that point would have provided our client with this simple and effective advice (even if she might still have been interested to learn what an "EMI" share option scheme could offer, anyway). As it was, the various circumstances were such, when we were eventually approached, that an EMI share option solution became essential. Thankfully, this is still beneficial and valuable. Our client is happy with what the scheme provides but she would also have valued the chance to consider the simpler solution and a saving of time and professional fees which could have augmented her early marketing efforts…
We say it again and again, throughout our planning and advisory work - taking early advice is so important.
Come and speak to us before taking action - we are always happy to chat at short notice and on a no obligation basis.
