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 Share Incentive Plans (SIPs): assessing suitability, key tax and design issues for listed/unlisted companies and overseas groups, with employee risks, EMI comparison, dividends and NICs/Apprenticeship Levy considerations

Published by a LexisNexis Share Incentives expert

Practice notes

Are SIPs always appropriate?

Because a share incentive plan (SIP) can deliver several kinds of award, it can suit a wide range of businesses and circumstances. Certain employers simply wish to allow staff to buy shares through the plan, whereas others aim to recognise performance by allocating free shares to employees. Another approach is to motivate take‑up by offering matching shares tied to the quantity employees acquire, linked to the number of shares purchased by each participant. Consequently, where an organisation is looking to broaden employee share ownership across its workforce, a SIP can be a sensible route, not least in light of possible tax benefits available under the plan. That said, the regime has tight rules and requires ongoing administration, so a SIP will not be the right fit for every business or situation...

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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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