Is this nonsense?

[Cantthinkofagood1]

My husband has worked for a start up company for a few years and has helped to build it up into a successful business, they have been promising him shares in the company for about 18 months and have said they are setting up an EMI scheme for this. However every time he asks about this and when it will happen he is told that the shares aren't worth anything at the moment and so they cannot do it yet.

AIBU to think this is nonsense? The owners have shares, surely they can give him shares now even if they aren't actually worth anything, then when/if they sell then he will get whatever they are worth then?

FWIW turnover of the business is over 1 million.

I smell total BS here.

If your husband has been promised jam and it's always tomorrow, it's time to cut his losses and instead work for a company that actually values him.

No, if it's for an EMI scheme the shares have to be worth something like £2k when you get them to be eligible for the correct tax relief etc.

Turnover is meaningless - it's net profit that's indicative of the success of a business.

I was going to call BS as well. However, mumonashoestring makes a good point. It may well be that the shares don't just have to have value (this can be theoretically calculated based on the net asset value of the business) but they may also have to be trading so that there is a recognised market value for the shares. Suggest you look into the regulations covering EMI schemes to be sure.

He is being taken for a ride (or the startup guys really need some expert advice on this topic). I had EMI shares in the company I work for for several years before they became worth anything. They will need to do a pro-forma valuation of the company (likely to be quite low), and then issue the shares. The company doesn't need to return any profit in order to do this. I'd push it and refuse to deliver any more services until he's been issued the shares.

Thanks everyone, I have looked into the regulations covering EMI (on the HMRC website and different accountancy websites) and none of them seem to mention a minimum value of the shares, eg

millconsultancy.co.uk/services/emi/emi-faqs

I'm calling BS as well.

Have emailed HRMC for guidance