Issuing EMI, CSOP and unapproved option grants

What it does

The Options module records share-option grants under the four UK schemes:

• EMI — Enterprise Management Incentive. HMRC-favoured for under-£30m gross-asset companies.
• CSOP — Company Share Option Plan. Older HMRC scheme for non-EMI eligible.
• Unapproved — non-HMRC. Income tax + NI at exercise.
• Growth shares — separate class of restricted shares, often used to side-step EMI limits.

Each grant has a vesting schedule that determines when the shares become exercisable.

Step 1: Create a vesting schedule

Schedules are reusable across grants. The standard UK / US startup default is "4-year monthly with a 1-year cliff" — 25% vests on the first anniversary, then 1/48th per month for the remaining 36 months.

1. Go to Company → Options
2. Click New schedule
3. Pick type:
   • Cliff — one big vest at month N, then linear after (standard)
   • Linear — even vesting from day 1 (no cliff)
4. Set total months (e.g. 48), cliff months (e.g. 12), frequency (monthly / quarterly / annual)
5. Click Create schedule

Step 2: Admit the recipient as a shareholder

EMI grants in Blankitt require the recipient to already be on the s113 register. Admit them via Shareholders → Admit shareholder if not. This makes the s113 register complete the moment they exercise.

Step 3: Grant options

1. Go to Company → Options
2. Click New grant
3. Pick the recipient from the admitted shareholders list
4. Pick the scheme (EMI by default)
5. Pick the share class (typically Ordinary)
6. Enter shares granted, strike price (nominal value is common for EMI), and the grant date
7. For EMI, optionally add the HMRC-agreed valuation — needed for the annual ERS return
8. Pick the vesting schedule you created above
9. Click Grant

Blankitt generates the vesting events automatically — one event per tick, with the cliff event covering the first 12 months of vesting at once.

Step 4: Track vesting and exercises

As time passes, vesting events become "vested" (vested=1). Hit Exercise on a grant to:

• Record N exercised shares
• Atomically issue those shares to the recipient via the standard share-transaction pipeline
• Mark the oldest vesting events as exercised (FIFO)

When a grant is fully exercised, status flips to fully_exercised. If an employee leaves before vesting, use the Lapse action to forfeit the unvested portion.

Tips

• For EMI, get the HMRC valuation before the grant date. Without it the grant can lose its EMI status.
• The default 4-year-monthly-cliff schedule is what 90%+ of UK startups use — create it once, reuse for every grant.
• Vesting doesn't change the cap table — only exercises do. The cap table shows what's actually been issued.
• HMRC requires an annual ERS return for EMI grants. The grant data here is the source — exporting an ERS-compatible CSV lands in Phase 4 polish.