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...

UK tax-advantaged Share Incentive Plans: qualifying companies, group eligibility, ordinary share capital and listing/control requirements, restrictions and disqualifying events

Published by a LexisNexis Share Incentives expert

Practice notes

The company establishing a SIP

The company setting up a share incentive plan (SIP) does not need to be the same entity whose shares are allocated. However, both:

the shares to be granted, and
the connection between the SIP-establishing entity and the company whose shares are issued

must satisfy the relevant legislative conditions.

A SIP can be created either:

solely for employees of the company that establishes it; or
for those employees and for employees of other companies it controls (a group plan)—see Constituent companies below.

In a group where the parent company’s shares are to be awarded, there are two options:

the parent company may establish the SIP and extend it to the appropriate subsidiaries; or
each subsidiary may establish its own SIP, provided the other statutory requirements concerning the shares under award are met—see Requirements for the shares.

The advantage of each subsidiary operating its own SIP is the flexibility to tailor award terms to its particular circumstances. Where the SIP is extended by the parent company to its...

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Jonathan Fletcher Rogers

Addleshaw Goddard

Jonathan is the head of Addleshaw Goddard's Employee Incentives and Remuneration practice, and advises UK and multinational clients on the design and implementation of share and cash-based employee incentive plans. He also advises quoted companies on corporate governance and disclosure issues in relation to remuneration. Jonathan is a regular speaker at conferences on executive remuneration and share plans more generally and has been recognised as a leading individual in employee incentives in Chambers and Partners....

Web page updated on 22/05/2026

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