Awarding EMI options with a signed option agreement

Why it matters

• The paperwork is generated for you. The Option Agreement is produced from the scheme you already configured — no drafting, no copy-pasting employee details.

• Signatures are collected in Shareflo. All four signing parties are invited, tracked and chased from one screen.

• Your cap table only moves when the grant is real. A grant that has been set up but not yet executed is held as a pending award and is excluded from the cap table until it is signed.

• The executed agreement is filed for you. Once signing completes, the signed document is stored against the employee automatically.

Before you start

Who can do this. You need to be a company user with Admin, Manager or HR permission to grant options.

The first step is to award an option in the usual way (at Manage equity → Manage options → Award new options). When you hit save, if the Option instrument being granted is linked to scheme documentation then the guided flow starts automatically. This will be the case if you created it through the EMI scheme generator. If it has no agreement attached, nothing changes and the award is recorded immediately, exactly as it always was. So the rule is: agreement on the instrument → guided flow; no agreement → straight save. See Setting up an EMI scheme for your company in the Related articles at the bottom of this page if you have not yet linked a scheme to an instrument.

Choose the grant date carefully. The Option Agreement is executed as a deed, so the grant takes effect when your company signatory and witness sign it — not when the employee accepts, and not when the last signature lands. Enter the date on which your company signatory and witness will sign. Shareflo carries that date through unchanged when the award is confirmed.

Have the four signing email addresses to hand. To launch the flow, you need to have the emails of the company signatory, the company witness, the employee, and the witness for the employee.

Only option awards use this flow. Share allotments are unaffected, even if the share class has an agreement attached.

Step-by-step: awarding options under your scheme

Step 1: Start the award as usual

Go to Manage equity → Manage options → Award new options and complete the award form. Select the option instrument linked to your EMI scheme. The form itself is unchanged — see Allotting shares and awarding options in the Related articles at the bottom of this page for a walkthrough of each field, and Setting the vesting parameters for how to set the cliff and vesting period.

When you press Save, Shareflo runs the same validation checks it always runs — quantity, dates, exercise price, vesting coherency, tax scheme compatibility. If anything is wrong you get the usual error message and stay on the form; nothing is created.

Step 2: Readiness checks

The first screen of the guided flow confirms your records are in good enough shape to issue EMI paperwork. Shareflo checks that:

• the employee has an up-to-date address;

• the employee has a National Insurance number;

• there is a valid HMRC valuation in place;

• the option's exercise price is no higher than the AMV (Actual Market Value) from your HMRC valuation.

Where something is missing you can fix it without leaving the flow — the stakeholder editor opens directly from the check that failed.

The address check must be cleared before you can continue. The Option Agreement is a deed and cannot be executed against an employee whose address is unknown. The remaining checks are advisory: if you want to, you can press Proceed Anyway and continue despite the warning.

Step 3: Confirm the award details

Here you supply the last few things the Option Agreement needs but the award form does not capture:

• UMV — the unrestricted market value to be written into the agreement. This is pre-filled from your most recent approved EMI valuation for the underlying share class. If you want to you can override this value. That should not normally be necessary. The only reason why you’d override the UMV would be if your board has agreed that a different UMV from your last HMRC valuation is appropriate. We do not recommend this.

• Bespoke option terms — any additional wording you want added to this employee's agreement. Any terms you do include here will be added word-for-word to the “Other terms” section of the option award. Most awards leave this blank. The two main reasons why you might include something in this section are either:

Be cautious about applying Bespoke option terms. HMRC has strict rules about eligibility conditions for EMI options, so you should seek advice before deviating from the templated agreement.

You can preview the template from this screen before adding any Bespoke terms.

When you press Proceed, Shareflo creates the award as a pending award and builds the draft Option Agreement document. Pending means the award details are stored, visible and still editable, but it is not yet part of your cap table.

Step 4: Confirm the signatories

Enter the email addresses for the four signing roles.

Each signer needs their witness physically present. The two witnesses sign to confirm they watched the relevant person sign, so arrange for each pair to be together when they sign. Shareflo sends all four invitations separately and does not police the order they are completed in.

Who can sign and who can witness? The Company signatory should be a company director. The Employee signatory is obviously the employee themselves. The witnesses can be anyone else over 18 who’s not party to the transaction. Best practice says they should not have a financial interest in the transaction either - so not a spouse of the employee for example. It is very common that the witnesses are simply other employees.

If you come back to this screen later, existing signatories are updated rather than duplicated — changing an email address here simply replaces the one already held.

Step 5: Review the agreement and covering email

Preview the finished Option Agreement, then write the subject line and body of the covering email your signatories will receive.

Send for signature issues the invitations. If anything goes wrong — a problem with the document or with the invitations — you are told on screen and nothing is sent.

The signature request is the employee's first contact. Shareflo does not send a separate notification when a pending award is created, so the covering email and signing invitation are what the employee actually receives. It is worth telling them the grant is coming before the request lands in their inbox.

Step 6: Manage the signatories

Once invitations are out, this screen tracks them. For each signatory you can see their invitation status, and from the row menu you can:

• Resend invite — sends the invitation again to the same address;

• Cancel invite — withdraws that signatory's invitation. Only use this if that person is signing offline. If you cancel an invite by mistake, you can’t “undo” it. You’ll need to void the whole agreement and start afresh.

• Replace signatory — swaps in a different email address and issues a fresh invitation to the new person. Use this, for example, if the Company director who originally planned to sign is no longer availble

You can close this screen and come back to it at any time.

What happens when everyone has signed

You do not need to do anything. When the final signature is captured, Shareflo:

1. marks the Option Agreement as Signed;

2. files the executed document against the employee;

3. converts the pending award into a confirmed one;

4. adds the new holding to your cap table

From that moment the award appears in your cap table and in all the usual reports, and the employee can see it in their stakeholder portal.

Recording an award without documents

If you would rather handle the paperwork yourself, the first screen of the guided flow offers Record the award without documents. Shareflo asks you to confirm, then records the award immediately as a normal confirmed award — no Option Agreement, no signing, straight onto the cap table.

This is the same result you would get from an instrument with no agreement attached.

Returning to an award in progress

If you have completed step 3 then you can return to the pending award (Manage equity → Manage options → Transaction ledger and edit the pending award) and choose Manage signatures. Shareflo takes you to the right place automatically:

• if the agreement has not yet been sent for signature, you return to Confirm award details, the bespoke terms and the signatories before sending;

• if it has been sent, you go straight to Manage signatories.

Sending for signature locks the terms. You cannot edit the award details once invitations are out. To change the terms at that point, void the award and start again.

Cancelling a pending award

Every pending award can be cancelled, and Shareflo picks the right method for you:

• Not yet sent for signature — the award is deleted. The draft agreement, the pending award and the associated file are removed completely, as if it had never been started.

• Already sent for signature — the award is voided. Shareflo cancels the signature links, and voids the document so nobody can sign it. Both the agreement and the award are marked as void. The record is retained for audit purposes but has no effect on your cap table.

In both cases nothing reaches your cap table, because a pending award was never on it.

❇️ Flo and Claude MCP Plugin

Flo and the Claude plugin can record an option award, but they cannot yet generate or send the Option Agreement. An award made through either of them goes straight onto your cap table with no paperwork, even where the instrument has an agreement attached. For now, use the web app for any grant you want papered through Shareflo. Document generation through Flo and Claude is coming.

Troubleshooting / FAQs

I saved the award and it went straight onto the cap table — no documents.

The option instrument you selected has no option agreement attached to it. Shareflo can only take care of documentation for option instruments that were created using the EMI scheme generator (or instruments which were linked to EMI scheme documents at the scheme creation process). See Setting up an EMI scheme for your company in the Related articles at the bottom of this page for how to link a scheme to an instrument.

My pending award isn't showing in the cap table totals.

That is intended. Totals, dilution and ownership percentages ignore pending awards until the agreement is fully signed.

I can't get past the readiness checks.

The employee's address must be recorded before an award can proceed. Open the stakeholder editor from the failed check, add the address, and continue.

I need to change the number of options after sending for signature.

You cannot edit a sent award. Cancel it — Shareflo will withdraw the document from signing — and record a new award with the correct terms.

I've cancelled an award but it's still listed.

Awards cancelled after invitations went sent out are marked as void, but the record is kept so there is a record that an agreement was issued and withdrawn. They have no effect on your cap table.

Can I award options to several employees at once?

No. Awards are issued one at a time; batch grants are planned.

Still stuck? Contact our support team at support@shareflo.co.uk or use the chat widget in your Shareflo app.