There are a number of requirements relating to the setup of the scheme to make sure that it qualifies as an EMI.
Types of shares: the options need to be for fully paid up and not redeemable shares (redeemable shares are shares that have a pre-agreed, fixed buy-back agreement from the company) .
Exercise period: the options need to be realistically capable of being exercised within 10 years.
Terms written down: the terms of the EMI agreement between company and employee need to be written down and kept in case HMRC wish to inspect. This must cover: date of option grant; number of shares; exercise price; when and how the options can be exercised; any restrictions on the shares (such as them being subject to a drag along clause); any performance conditions (such as meeting specific targets); any forfeiture risk (for example on leaving the company).
Options not transferable: the options must not be transferable, except in the case of death.
Amendments: cannot be made to improve the rights of the holder (in terms of number of shares, price, or when they can be acquired), unless the impact is minimal. Performance conditions can only be changed if they make them fairer for the employee and not more difficult to achieve.
Company re-organisation: if the company is acquired post scheme set up there are a detailed set of conditions if you wish the scheme to be replaced within the new entity (https://www.gov.uk/hmrc-internal-manuals/employee-tax-advantaged-share-scheme-user-manual/etassum55000).
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