My client a trading company (‘the company’) wishes to acquire the shares of a departing employee shareholder (‘the leaver’). The company has suggested that the simplest option would be for the shares to be bought back out of reserves and cancelled so that they can then be reissued by way of share options to other employees including the senior team who already have shareholdings in the company and the non-exec directors (NEDs). The company has also heard of the idea of using an employee benefit trust (EBT) to warehouse shares. Some of the company’s shareholders have claimed enterprise investment scheme (EIS) relief on their shares. The EIS shares were issued less than three years ago. The company wants to know whether it should buy back the leaver’s shares or set up an EBT which would then buy the...
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My client a trading company (‘the company’) wishes to acquire the shares of a departing employee shareholder (‘the leaver’). The company has suggested that the simplest option would be for the shares to be bought back out of reserves and cancelled so that they can then be reissued by way of share options to other employees including the senior team who already have shareholdings in the company and the non-exec directors (NEDs). The company has also heard of the idea of using an employee benefit trust (EBT) to warehouse shares. Some of the company’s shareholders have claimed enterprise investment scheme (EIS) relief on their shares. The EIS shares were issued less than three years ago. The company wants to know whether it should buy back the leaver’s shares or set up an EBT which would then buy the...
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