Government guidance on the new Employee-Shareholder Employment Status

  • November 15, 2013
  • By Hunters Law

The Department for Business, Innovation and Skills (“BIS”) has published guidance for employers and employees on the new employee-shareholder employment status.

The new employment status, which was introduced on 1st September 2013, allows new and existing employees to acquire shares in their employer company (or the parent company of their employer) in return for giving up certain employment rights.

The employee must receive fully paid up shares worth at least £2,000 in their employer company (or its parent company) and pay no consideration for those shares.  The employee must agree to enter into an agreement with their employer confirming that they will forfeit the relevant employment rights.

There are a number of legal and administrative issues to be considered and addressed by an employer offering the new employment status and to be understood by an employee considering an offer of the new status.  The BIS Guidance offers preliminary information for employers and employees and can be found here.

If you would like more detailed advice on the legal obligations that are imposed on an employer offering the new employee-shareholder status to new and/or existing employees or you are an employee who would like independent advice in relation to an offer of employee-shareholder status, please contact the partner at Hunters having responsibility for your legal matters, or (for new enquiries) please contact a member of our employment team.

This article is based on the law in force as at 15th November 2013.  Although we endeavour to ensure that the content is accurate and up to date as at that date, it is designed to provide general guidance only and is not intended to be comprehensive or to constitute professional advice.  Specific advice should always be sought, and you should only rely on advice which is given, by reference to particular facts and circumstances. 

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