Stock options

[b0redom]

Hi All,
I may have managed to get a gig direct with a startup. As part of their perm package they give people stock options. If I manage this as a contractor through my Ltd how does this work?

Does anyone have an example clause stating where their Ltd Co is elligable for stock options? I would have thought that naming me specifically as the beneficiary in the contract is a MASSIVE IR35 pointer.

Regards....

b0redom

[northernladuk]

Hi All,
I may have managed to get a gig direct with a startup. As part of their perm package they give people stock options. If I manage this as a contractor through my Ltd how does this work?

Does anyone have an example clause stating where their Ltd Co is elligable for stock options? I would have thought that naming me specifically as the beneficiary in the contract is a MASSIVE IR35 pointer.

Regards....

b0redom

Are you talking about pointer IN or pointer OUT? How you get paid isn't much to do with MOO and client control but if they give treat you the same as the permies itsn't good. As long as it is documented well I can't see the fact you are taking your money in a slightly different way to make much difference. If you stand in line with your hand out next to the permies and get the same would. I think the devil will be in the details. Will be interested to say what people think.

How do you feel about taking stock options as part of your package though? What happens when it goes bust in 6 months? I read that 80% of startups fail in the first 5 years. I can't find the official figures though. Gotta say it wouldn't appeal to me at all.

[kingcook]

How do you feel about taking stock options as part of your package though? What happens when it goes bust in 6 months? I read that 80% of startups fail in the first 5 years. I can't find the official figures though

Look on the bright side....

What if in the next X years the company is sold for £10m, and you have 20% shares?

[b0redom]

Are you talking about pointer IN or pointer OUT? How you get paid isn't much to do with MOO and client control but if they give treat you the same as the permies itsn't good. As long as it is documented well I can't see the fact you are taking your money in a slightly different way to make much difference. If you stand in line with your hand out next to the permies and get the same would. I think the devil will be in the details. Will be interested to say what people think.

How do you feel about taking stock options as part of your package though? What happens when it goes bust in 6 months? I read that 80% of startups fail in the first 5 years. I can't find the official figures though. Gotta say it wouldn't appeal to me at all.

Well, this would be based at home (there's no UK office currently), working on my own kit, providing my own Internet, phone etc etc etc. I would obviously have MOO and ROS in the contract too. The pointer is more the fact that every other contract says between ClientCo and MyCo Ltd.

If I subsequently have ClientCo and b0redom, even for just stock options, then that implies no ROS, which in turn means inside IR35 no?

TBH not getting the stock options wouldn't be the end of the world, but if I didn't and all the permies made $Millions. I'd be a bit fed up.

I'm pushing for a decent day rate too of course!

[northernladuk]

Hmm well that is a problem. I would be akin to you getting paid £300 of a £350 day rate to your business and £50 directly to you.

Has he offered you the stock options? The fact that this is perm package should have abolutely no bearing on they way you are paid.

What is the client like? Would he be open to some extra paperwork? What about trying to get something worded such that your LTD gets a set rate for the work and anyone from your LTD that works on the account from you LTD would also get a free stock? Using the term 'anyone' would imply you are a business in it's own right and the free stock would not look like renumeration?

Can you not 'buy' the stock options from him personally as a side investment and not have it as part of your contract? Buying them (dunno how or how much) would indicate you are personally investing in the startup so not unreasonable to think you personally would be compensated.

Clutching at straws but you need to find some way of distancing the stock options from the company if he refuses to give your company the options.

Why won't he give your company the options by the way?