Jun 26
For many privately owned companies, long-term success often depends on sustainable growth. And as businesses scale, the ability to attract, motivate and retain key individuals often becomes just as important as capital or market opportunities.
Employee Management Incentive (EMI) share option schemes are a popular tool that qualifying companies can use to support this next stage of development.
EMI schemes are designed for smaller, higher-risk trading companies and allow selected employees to acquire shares in the business in a tax-efficient way.
By linking reward to long-term value rather than short-term results, EMI schemes can help to reinforce a shared focus on sustainable growth. This can be particularly helpful in owner-managed and family-owned businesses where founders are beginning to rely more heavily on a wider management team to deliver day-to-day performance.
As businesses mature, questions around succession and continuity start to be raised. Whether the long-term plan involves an eventual sale to a third party, a management-led buyout (an MBO) or passing the business to the next generation of family, careful forward planning is essential. An EMI share option scheme can be a key component of any such plans.
EMI options are commonly structured so that they can only be exercised after specific events, such as a sale of the business (ie exit only) or once pre-defined time and performance conditions are met (with performance milestones either for the employee or the company or both). This allows owners to retain control while introducing an incentive framework for key employees that supports stability, commitment and future leadership development.
The risk of losing key individuals is a recurring issue for growing companies as it could seriously disrupt operations, unsettle clients and dilute value at critical moments.
When combined with well-drafted leaver provisions, an EMI scheme can form part of a broader approach to retention and workforce resilience during periods of growth or change.
When assessing whether an EMI scheme is appropriate, businesses will need to consider the following criteria (a number of which were adjusted by the Autumn 2025 budget, coming into effect from April 2026)
The Corporate and Commercial team at Raworths has extensive experience of supporting companies with the design and implementation of EMI share option schemes as part of wider growth and planning considerations.
Our work typically includes designing the scheme, preparing the scheme rules and option agreements, and preparing the corporate approval documents to adopt the scheme and grant the options.
We also work closely with clients’ accountants and tax advisers to ensure that the statutory tests for EMI schemes are satisfied and that all reporting requirements to HMRC are met, on adoption of the scheme and on grant of options.
Please do get in touch if you wish to discuss further.
Published on 30 June 2026
Raworths sponsors Yorkshire Business Insider’s Top 100 OMB rankings in June 2026’s edition of the publication.
The information and any commentary contained in this briefing is for general information purposes only and does not constitute legal or any other type of professional advice.
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