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bigduckontax, Accountant
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In the EMI options scheme, for a startup company (private limited)

Customer Question

In the EMI options scheme, for a startup company (private limited) with 2 rounds of investment, how is the market value calculated? If close in time to an investment round, would this always be set by the share price in the last investment round?
Submitted: 4 years ago.
Category: Tax
Expert:  bigduckontax replied 4 years ago.
Hello, I'm Keith and happy to help you with your question albeit with some difficulty.

HMRC's not terribly helpful advice in this matter is:

'Start-up companies

These are new companies with no trading history and little in the way of assets. It is reasonable to consider the price paid by any external investor in the company. If there is no external investment the par value of shares is likely to be reasonable, even with some discount to reflect lack of preferential rights.'

Your enquiry regards the market value. For a start up company such values are a trifle nebulous and it seems likely that in the light of any other evidence [ie none] that at this stage the market value might well be the option price, the price people are willing to pay.