Carta offers a tool that will help administrators keep track of their EMI/CSOP limit values.
When maintaining a tax-advantageous scheme, there are limits companies should observe when granting awards to employees. When it comes to EMI/CSOP limit values, Carta offers company administrators an easy way to remain compliant regarding the limit values.
You can obtain information about your company's EMI / CSOP limits by navigating to Equity Compliance > Compliance Centre.
Click Manage Limits to obtain more detailed information on your EMI/ CSOP limit values.
Alternatively, you can access the EMI and CSOP Limits page from Plans > Plan Limits.
In EMI and CSOP limits you can see a list of employees and how much they have been issued that are being counted towards the Individual's limit. Under the Status column we have three different statuses:
- Within Limit - It means that this individual has been issued less than 80% of their individual limit for both CSOP or EMI Issuances.
- Approaching Limit - That will work as a warning to flag that this individual is almost achieving their limits on EMI or CSOP issuances. That status will be trigger if the value considering the issuances are 80% or above the total limit allowed.
- Limit Reached - That will flag that this person has reached their limit for CSOP and/or EMI issuances and you can therefore not issue anymore to them under EMI/CSOP.
Also, in the EMI and CSOP Limits page, you can find the value of EMI issuances the company currently has issued and how much it is towards the company limit (CSOPs do not count towards the company limit as there is no company limit on CSOPs.)
Click on the name of the grantholder to find details of their issuances and click Go to Grants to see a detailed list of grants counting towards the EMI/CSOP values of that specific grantholder.
When it comes EMI and CSOP limits, there are some things to be mindful of:
How the values are obtained
The EMI and CSOP values for an individual will be based on how many EMIs and CSOP options they have been issued multiplied by the UMV at the time of issuance.
The UMV in question can be recorded under Compliance Valuations on the company's Carta account.
EMI: Limit specifications
The EMI scheme operates with two limits for individuals:
Amount outstanding - All grants regardless of grant time are taken into account. Exercises and cancellations are taken into account (i.e. these will not count towards the total). Notice that both EMI and CSOP (if any) grants are included in the limit. The amount is based on valuation at grant time (UMV).
Amount granted within a 3-year period - Grants granted within a 3-year period are taken into account. Exercises and cancellations are not taken into account (i.e. these will be disregarded towards the total value). Notice that both EMI and CSOP (if any) grants are included in the limit. The amount is based on the valuation at grant time (UMV).
Furthermore, there is a limit for the company:
- Company limit: £3 million
CSOP: Limit specifications
The CSOP plan allows a maximum issuance of £60,000 per employee in total. The amount is also based on valuation at the time of issuance (UMV).
There is no company limit for CSOP issuances.