Growth shares give staff, advisors, and late joiners a stake in the value they help create from here. We design the class, set a clean hurdle, and put the paperwork in order so the tax story holds up.
When to use this
- EMI won’t fit (non-employees, group structure, size/sector issues) but you still want equity with real upside.
- You want to reward future value, not past gains-hurdle set above today’s worth.
- Advisors or senior hires need equity now (not options) with simple buy-back on leaver.
- You’re preparing for a round and want the cap table to stay readable.
What’s include
Scheme design. Hurdle mechanics, participation %, vesting (if needed), and good/bad leaver outcomes that you can enforce.
Articles & new class. Draft the new share class, amend articles, class rights, drag/tag alignment, and pre-emption fit.
Subscription & resolutions. Board/shareholder approvals, subscription agreements, and tidy Companies House filings (special resolution, amended articles, SH01).
Valuation support. Short, defendable note for the hurdle and issue price; cap-table before/after.
s.431 election pack. Joint elections and guidance so “restricted securities” tax doesn’t bite later.
ERS admin. Registration where required and annual return scheduled so it’s not a year-end scramble.
Pricing (fixed fees; bespoke available)
Growth share class setup + first grants — from £2,250 (ex VAT)
Valuation support (hurdle/issue price) — from £650 (ex VAT)
ERS registration & annual return — from £350 (ex VAT)
Leaver/buy-back event (per event) — from £450 (ex VAT)
If history is messy—multiple classes, old promises, odd articles—we’ll scope a bespoke bundle against our standard rates (£275/hr) and fix-fee it before we start.
How we deliver
Discovery. Cap table, target recipients, and the outcome you want at exit.
Design & paperwork. Class drafted, articles amended, approvals prepped; clean leaver/buy-back rules.
Issue & file. Subscriptions signed, filings made, cap table updated.
Operate. s.431 elections collected; ERS/annual return diarised; short “how to” for finance.
Timeline
Inputs this week. First drafts follow quickly. With sign-offs in place, we can usually create the class and issue within a few working days, then complete filings and elections on a tight timetable.
Inputs we’ll need
- Current cap table and latest valuation markers (deck, investor notes).
- Who will receive growth shares, and why (role, timing, vesting).
- Articles and any investor conditions we must respect.
- Your preferred leaver/buy-back approach and any prior promises.
FAQs
How do growth shares differ from EMI options?
EMI is an option for employees with strict eligibility and generous tax reliefs. Growth shares are actual shares with a hurdle above today’s value; they can work for non-employees and wider cases, but you handle s.431 elections and ERS reporting. We’ll map which route fits your facts.
What exactly is the “hurdle”—and how do we set it?
It’s the value the company must exceed before growth shareholders participate. We anchor it to a defendable view of today’s worth, document the logic, and show the before/after on the cap table so diligence won’t wobble.
Do we really need s.431 elections and ERS?
Yes. Growth shares are usually “restricted securities”. The s.431 election avoids future tax on lifting restrictions; ERS reporting keeps HMRC happy. We prepare the forms, collect signatures, and diarise the annual return so it isn’t forgotten.
Understanding Growth Share Schemes
We use growth shares when EMI won’t stretch or when you want people sharing upside from now, not from years ago. A company growth share scheme lets you do that without tearing up today’s cap table. We set a hurdle above the current value, write leaver and buy-back rules you can actually use, and make the filings read clean.
How it starts in real life: you’ve got a senior hire joining next month and an advisor who’s been invaluable. Cash is tight. The deck shows momentum. We open the cap table, sketch where you want it after the next round, and size participation to match that picture. No template pools. No wishful maths.
Paperwork matters more than people think. We amend the articles to create the class, align pre-emption and drag/tag, prepare subscription agreements, then file the special resolution, amended articles and SH01 at Companies House. Because growth shares are usually restricted securities, we gather the s.431 elections while everyone’s paying attention (not three weeks later), and we log ERS where required. Finance gets a short note: what was issued, at what price, and how the registers change.
The hurdle isn’t hand-waving. We anchor it to a defendable view of today’s worth and keep a one-pager your accountant can point to during diligence. If you’re running options as well, we show the before/after on the cap table so investors can see the pieces working together.
A quick example. Last quarter a client needed growth shares for a head of ops and a long-standing advisor. We agreed the hurdle on a Wednesday call, drafted the class, ran approvals, issued on Friday, filed on Monday, collected s.431 the same week. No theatrics. Just steady movement.
Call them growth share schemes or company growth share schemes – done properly, people know what they hold, the rights are enforceable, and the public record matches the story in your deck. That’s the goal.
