It's not clear what info is needed. When setting up a new EMI Scheme, it will first be registered as a scheme with HMRC. You can view what schemes are registered under the ERS section under the PAYE portal. The individual employee grants are then notified and it's in that notification process that it is essential to take screenshots (e.g. date of grant, employee names and option numbers etc). I assume you need those details? Unfortunately HMRC will not disclose them to my knowledge. It is a very badly designed part of the site.
It depends on the facts. Normally a new issue of shares of a new class (say series A preferred) following an investment would not cause a disqualifying event. It would be perverse if such an event did so! It's more a matter of altering the share capital used for the EMI options. An example is where a client unwittingly converted its A and B ords into one class of simple ords. The B class had been used for the EMI. The options became ineligible because of that.
I think you would probably just do a share reclassification. Under CA 2006 s630 you do not need the approval of other shareholders of the same class to reclassify Treasury shares. But also check the Articles to ensure this is allowed by them.
I agree with Andrew1211 - the HMRC valuation acceptance is valid for 60 days from the date of their letter, and we often have changes in option numbers during that period (e.g. due to joiners and leavers). So long as the overall % being granted doesn't materially change it is fine. Note that any change will obviously impact the original share value/price agreed, as you need to divide the overall company valuation by the finalised number of fully diluted shares to get the correct AMV/UMV.
A few comments:
1. The valuation of a company for EMI purposes tends to be quite different from valuing a company for an investment or commercial sale, and agreeing the value upfront with HMRC is an important step in the process, as it has a huge impact on the employee’s tax position. For an EMI scheme, the lower the agreed share price the more beneficial it is for the employee - first, the cost for them to buy the shares is lower, and second, they don’t pay so much tax.
So in valuing the company we would avoid ‘over-egging’ the value and instead emphasise the risks and downsides that might exist. You would then request a discount on the 100% value for the following reasons:
1. an option holder receives only a small percentage of the shares and therefore they have very little ‘power’ compared with holding 100%, and this justifies a ‘minority shareholding discount’
2. there will typically be restrictions on the option shares e.g. they may lapse if the employee leaves the company, or they might be non-voting shares
Usually we obtain a deep discount on the full value per share. That value is confirmed as agreed by HMRC and will be valid until a sale of the company or for a maximum of 10 years. This means you can set the option exercise price at that value and there will be no income tax liability for the option holders when they exercise the options and buy the shares (alternatively you could set the price lower and they would just pay income tax on the discount as a benefit in kind). When they sell the shares any gain over the price paid will be charged capital gains tax at a rate of only 10%.
Generally, as a matter of policy HMRC is quite supportive of EMI schemes, and their valuation division understands that in an ‘entrepreneurial' company the employees – who basically risk their livelihoods - have typically a lot more to lose than external investors, particularly when the business is still facing risks such as being loss making, cash constraints and strong competition. HMRC appreciates that most of an investment valuation in such businesses is based on ‘hope value’ rather than definite numbers. We have several times agreed EMI valuations much lower than the investment valuation.
2. You would not normally need to go to the extent of using DCF.
3. Vested is certainly cheap and cheerful but you get what you pay for and EMI can be a complex matter and it's easy to fall into traps. They do not include any valuation work.
The Mill Consultancy
More usefully than the previous posting perhaps, I would confirm that a breach of the material interest test is not a disqualifying event post-grant, i.e. the fact that the EMI option holder exceeds 30% due to being associated via a spouse does not disqualify his/her EMI options. All it means is that they cannot be awarded any further EMI options in the future.
The Mill Consultancy
PSC - use Inform Direct
We use Inform Direct for our company secretarial work and their PSC function is very easy to use. As most PSCs (directors, shareholders) are pre-populated you can simply choose from an existing list. www.informdirect.co.uk