• At Kemp Little, we are known for our ability to serve the very particular needs of a large but diverse technology client base. Our hands-on industry know-how makes us a good fit with many of the world's biggest technology and digital media businesses, yet means we are equally relevant to companies with a technology bias, in sectors such as professional services, financial services, retail, travel and healthcare.
  • Kemp Little specialises in the technology and digital media sectors and provides a range of legal services that are crucial to fast-moving, innovative businesses.Our blend of sector awareness, technical excellence and responsiveness, means we are regularly ranked as a leading firm by directories such as Legal 500, Chambers and PLC Which Lawyer. Our practice areas cover a wide range of legal issues and advice.
  • Our Commercial Technology team has established itself as one of the strongest in the UK. We are ranked in Legal 500, Chambers & Partners and PLC Which Lawyer, with four of our partners recommended.
  • Our team provides practical and commercial advice founded on years of experience and technical know-how to technology and digital media companies that need to be alert to the rules and regulations of competition law.
  • Our Corporate Practice has a reputation for delivering sound legal advice, backed up with extensive industry experience and credentials, to get the best results from technology and digital media transactions.
  • In the fast-changing world of employment law our clients need practical, commercial and cost-effective advice. They get this from our team of employment law professionals.
  • Our team of leading IP advisors deliver cost-effective, strategic and commercial advice to ensure that your IP assets are protected and leveraged to add real value to your business.
  • Our litigation practice advises on all aspects of dispute resolution, with a particular focus on ownership, exploitation and infringement of intellectual property rights and commercial disputes in the technology sector.
  • We have an industry-leading reputation for our outsourcing expertise. Our professionals deliver credible legal advice to providers and acquirers of IT and business process outsourcing (BPO) services.
  • We work alongside companies, many with disruptive technologies, that seek funding, as well as with the venture capital firms, institutional investors and corporate ventures that want to invest in exciting business opportunities.
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  • With a service that is commercial and responsive to our clients’ needs, you will find our tax advice easy to understand, cost-effective and geared towards maximising your tax benefits.
  • At Kemp Little, we advise clients in diverse sectors where technology is fundamental to the ongoing success of their businesses.They include companies that provide technology as a service and businesses where the use of technology is key to their business model, enabling them to bring their product or service to market.
  • We bring our commercial understanding of digital business models, our legal expertise and our reputation for delivering high quality, cost-effective services to this dynamic sector.
  • Acting for market leaders and market changers within the media industry, we combine in-depth knowledge of the structural technology that underpins content delivery and the impact of digitisation on the rights of producers and consumers.
  • We understand the risks facing this sector and work with our clients to conquer those challenges. Testimony to our success is the continued growth in our team of professionals and the clients we serve.
  • We advise at the forefront of the technological intersection between life sciences and healthcare. We advise leading technology and data analytics providers, healthcare institutions as well as manufacturers of medical devices, pharmaceuticals and biotechnological products.
  • For clients operating in the online sector, our teams are structured to meet their commercial, financing, M&A, competition and regulatory, employment and intellectual property legal needs.
  • Our focus on technology makes us especially well positioned to give advice on the legal aspects of digital marketing. We advise on high-profile, multi-channel, cross-border cases and on highly complex campaigns.
  • The mobile and telecoms sector is fast changing and hugely dependent on technology advances. We help mobile and wireless and fixed telecoms clients to tackle the legal challenges that this evolving sector presents.
  • Whether ERP, Linux or Windows; software or infrastructure as a service in the cloud, in a virtualised environment, or as a mobile or service-oriented architecture, we have the experience to resolve legal issues across the spectrum of commercial computer platforms.
  • Our clients trust us to apply our solutions and know-how to help them make the best use of technology in structuring deals, mitigating key risks to their businesses and in achieving their commercial objectives.
  • We have extensive experience of advising customers and suppliers in the retail sector on technology development, licensing and supply projects, and in advising on all aspects of procurement and online operations.
  • Our legal professionals work alongside social media providers and users in relation to the commercial, privacy, data, advertising, intellectual property, employment and corporate issues that arise in this dynamic sector.
  • Our years of working alongside diverse software clients have given us an in-depth understanding of the dynamics of the software marketplace, market practice and alternative negotiating strategies.
  • Working with direct providers of travel services, including aggregators, facilitators and suppliers of transport and technology, our team has developed a unique specialist knowledge of the sector
  • Your life as an entrepreneur is full of daily challenges as you seek to grow your business. One of the key strengths of our firm is that we understand these challenges.
  • Kemp Little is trusted by some of the world’s leading luxury brands and some of the most innovative e-commerce retailers changing the face of the industry.
  • HR Bytes is an exclusive, comprehensive, online service that will provide you with a wide range of practical, insightful and current employment law information. HR Bytes members get priority booking for events, key insight and a range of employment materials for free.
  • FlightDeck is our portal designed especially with start-up and emerging technology businesses in mind to help you get your business up and running in the right way. We provide a free pack of all the things no-one tells you and things they don’t give away to get you started.

Enterprise Management Incentive (EMI) Options

EMI schemes and EMI options are designed to provide a flexible and tax efficient way of helping smaller independent companies recruit and retain high calibre employees.

A major advantage of EMI options is that they make it possible to incentivise employees with a stake in the future growth of the company on a discretionary basis, as unlike some other share schemes EMI options do not need to be offered to all employees equally.

In addition, EMI options benefit from extremely generous tax treatment – both for the employees but also for the employer company.

Which companies can issue EMI options?

EMI options may be granted by any listed or unlisted company (whether or not it is a UK company) provided that it satisfies the following criteria:

  • It is independent, i.e. not a subsidiary of or controlled by another company. Accordingly, in the case of a group of companies, the EMI options must be issued by the parent company, notwithstanding that the employee may be employed by a subsidiary
  • The company (or the group of companies) must have gross assets of not more than £30 million
  • The company (or the group of companies) must have no more than 250 employees
  • The company (or at least one company in a group of companies) must carry on a “qualifying trade” (and in case of a group of companies, at least the group as a whole must not carry on business substantially in non-qualifying activities). A company will satisfy this test where it carries on a trade wholly or mainly in the UK, and it does not carry on one of a number of excluded activities such as land dealing, farming, banking and leasing. Non-UK companies must have at least a permanent establishment in the UK.

It is not necessary to obtain advance approval from HMRC, but if asked, they will give an opinion/advance clearance on whether a company meets the EMI requirements.

Which shares can qualify for EMI relief?

The shares over which EMI options are granted must be ordinary shares in the company, which are not redeemable. The shares must be fully paid up shares, which can be subject to restrictions (for example restrictions on transfer) provided that the details of the restrictions are specified in the option agreement with the employee. It is possible to establish a special class of employee shares for the EMI options, which have different rights.

Can all employees participate in EMIs?

In order to participate, an employee (including an executive director) must work for the company (or a group company) for at least 25 hours per week or, if less, 75% of his working time. Further, an employee (together with his associates) must not own or control more than 30% of the company.

Limits on the grant of EMIs

A company can grant EMI options to any number of employees, provided that the total market value of the shares under EMI options does not exceed £3 million, based on the value of the shares at the date of grant of the EMI options.

An individual limit of £250,000 also applies. This is measured by the market value of the shares subject to unexercised EMI options calculated at the date the options are granted. Any unexercised options held by an employee which he acquired under an approved HMRC company share option plan also count towards this limit.

Required terms of an EMI option

There are few restrictions on the terms of an EMI option, which allows for substantial flexibility when granting EMI options. The only required terms are that the options must be exercisable within ten years of their grant and may not be exercisable more than twelve months after the death of the employee. Also, the options must not be transferable. The option agreement must be in writing.

Taxation of EMIs

EMI options are designed to be tax efficient for both the employer and the employee.

Employee Taxation

For the employee, no income tax or national insurance contributions (“NIC”) are payable on the grant of an EMI option, irrespective of whether the option is granted at market value.

Assuming that the exercise price of the options was not less than the market value of the shares at the date the option was granted, no income tax or NICs are payable when the options are exercised.

When the employee sells the shares, capital gains tax is payable on any gain (broadly the difference between the exercise price of the options and the sale price of the shares) – subject to any available reliefs. If entrepreneurs’ relief is available then the rate of tax on any gain will be 10%.

Income tax and possibly NICs may be payable by the employee if the option is exercised more than 90 days after a “disqualifying event”. This is payable on the growth in value after the disqualifying event. There are various disqualifying events, such as the company being taken over, the employee ceasing to be a qualifying employee etc.

Employer Taxation

The employer company benefits from a corporation tax deduction provided that certain conditions are satisfied. The deduction is equal to the difference between the market value of the option shares at the date of exercise and the option price.

HMRC Notification

The EMI plan would need to be registered with HMRC online and the  grant of EMI options must be notified to HMRC online within 92 days of the date of grant. 

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