Employee Stock Ownership Plan ESOP
Offer your employees a share in your company. All at a transparent package price of CHF 3'015
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To retain key team members in new startups and growing companies and to attract new talent, models have been developed to involve employees in the company or its success. An efficient setup of the employee participation plan can increase both the attractiveness of the employer and the productivity of the employees. The ESOP (Employee Stock Ownership Plan) employee participation package efficiently and cost-effectively covers strategy, setup, legal documents, and tax clarifications, including personal consultation and legal documents tailored perfectly to the startup.
About the Package
The earlier the ownership structure of the company or the prospects thereof are clarified, the better. A well-structured employee participation plan can prevent so-called "cofounder disputes" and ensure that new employees have a strong incentive to commit to the company long-term.
An employee participation plan transparently regulates who gets what, when, under what conditions, and what happens if one of the parties leaves the company or wants to reduce their workload. Therefore, we recommend addressing this issue early on. Often, having an existing employee participation program can be advantageous when recruiting new employees.
Target Audience
Companies looking for a tool for (i) motivation, (ii) retention, and (iii) additional compensation for employees. At the same time, it can also protect the liquidity of a company in an early stage, where the first team members are primarily compensated through equity securities.
Process and Duration
Typically, setting up a stock ownership plan (ESOP) takes between 2-6 weeks. The process steps include:
- Kick-off meeting (goals, strategy & key plan variables)
- Information exchange (gathering required information through efficient processes & questionnaires, with support provided for completion)
- Customized legal documents (creation of all necessary legal documents and adaptation of existing documents, e.g., employment contracts)
- Personal consultation and finalization (discussion of all documents, clarification of open questions about the participation plan)
- Conclusion (finalization and guide with tips for plan administration)
Services
The Employee Stock Ownership Plan (ESOP) package includes personal consultation, best-in-class templates, and customized adjustments for the company. The following is covered:
- Comprehensive advice on the topic of participation plans & taxes for the Canton of Zurich (in other cantons upon request)
- Consultation on important key variables (vesting plan, plan size, exercise price, etc.)
- Implementation tailored to the strategy and goals of the company
- Creation of the participation plan document including allocation agreement
- Preparation of capital measures (articles of association, shareholder agreement, and employment contracts)
- Guide for plan administration
- Guide with key points for employees
Legal Questions
All legal questions can be clarified in the kick-off meeting and workshop where all documents are discussed. The stock ownership plan package also includes an understandable guide with tips and instructions for plan administration.
Price
Fixed price CHF 3,015 incl. VAT.
In addition, there are approximately CHF 600 for the notary and CHF 600 for the commercial register, if a capital increase is necessary.
You will receive an individual offer for the legal package. Do you have any special requests or circumstances that need to be considered? Please mention them in the free text in the request form.
Get a non-binding offer
What do I need to know about the Employee Stock Ownership Plan (ESOP)?
- At the time when shares are transferred to the employee, the difference between the exercise price and the market value is considered taxable income for the employee.
- If the shares are sold at a later date for a higher value, a so-called tax-free capital gain can generally be realized.
The company must pay social security contributions on the portion considered as salary for the employee.
- The core document is the so-called Participation Plan. This document regulates all details such as vesting, eligible participants, and conditions.
- Furthermore, an individual allocation agreement is concluded with each participant.
- Tax Ruling
- Adjustment of the Articles of Association (if a conditional capital increase is required)
Up to the seed phase, between 7-15%. This percentage decreases over time as the company's value increases.
Yes. Generally, when issuing shares (via a capital increase), at least the nominal value must be paid (either by the employer or the employee).
Yes. With the allocation of shares, the employee becomes a shareholder with all shareholder rights. Therefore, it is important to have a well-structured and thoughtful shareholder agreement to regulate the rights and obligations of the shareholders in detail.