Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Shares definition

What does Shares mean? In company law practice, a share is a unit of a member’s interest in a company, carrying the rights and obligations attached to its class (for example, voting, dividends and return of capital on a winding up). The Companies Act 2006 simply states that a share is a share in a company’s share capital; the Irish Companies Act 2014 adopts a broadly equivalent approach. Usage and effect are consistent across England & Wales, Scotland, Northern Ireland and Ireland. A company’s share capital comprises the number of shares it allots and issues to investors on or after incorporation. Those...

CSOP eligibility: qualifying companies, ordinary share capital, control, restrictions, transferability, exercise price and limits (UK)

Published by a LexisNexis Share Incentives expert

Practice notes

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Company share option plans (CSOPs)

These are statutory, tax‑advantaged, discretionary share option arrangements that may run on an all‑employee basis, though they are more often applied selectively. Where the statutory rules are satisfied, favourable tax treatment may follow. The CSOP framework is prescriptive, laying down multiple conditions to be met both at grant and at exercise, covering matters relating to:

the company issuing the options
the employees to whom options are granted, and
the shares placed under option

Detailed conditions apply at each key stage of an option’s lifecycle. They govern eligibility of issuer, recipients and underlying shares alike.

This Practice Note concentrates on the CSOP eligibility criteria that must be met by the company and by the shares to be put under option.

Those criteria are explained with reference to the income tax relief contained in sections 521–526 of the Income Tax (earnings and Pensions) Act 2003 (ITEPA 2003).

A company should ensure it is satisfied that it complies with these requirements, as responsibility for confirming that the scheme fulfils the statutory rules rests with the applicant.

See Practice Note: CSOP—self‑certification, registration and filing requirements.

For tax‑favoured CSOPs, the scheme shares must satisfy the relevant requirements at the...

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Web page updated on 21/05/2026

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