Stock options

Startups and covenants partners: What is "Vesting"?

abogado startup pacto de socios vesting

In pacts partners startups clauses "vesting" usually raises, requiring the maintenance of options or shares for a period of time.

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Stock options (stock options): Fiscal Outlook

abogado valencia stock options fiscalidad

 

 

 

 

 

 

Stock options (stock options): Fiscal Outlook

In this post we will see the tax treatment plans stock options (stock options) used in some startups to motivate key people.

If the recipient exercises the option and acquires shares for less than market value, would be a payment in kind. This remuneration is taxable in the income tax on the difference between the value of the share price and the amount actually paid for the shares.

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Stock options (stock options): Labor Perspective

abogado valencia stock option laboral

Stock options (stock options): Labor Perspective

 

 

The establishment of a plan de stock options (stock options) has consequences from the point of view of labor law must take into account.

To the courts, has been established in numerous decisions the wage nature of these incentives.

Thus indicating STSJ Madrid 20 December 2005:

"It can be said that parts of this business are the same as the labor contract, its cause is the working relationship between them and the object coincide fully with that contract for both parties, for the employer to achieve greater worker services and to this higher revenues. "

Labor considered by entailment between the activity of the worker and the profits from the exercise of stock options. It also has character mandatory for the enterprise, as salary. The fact that there is a factor of "randomness" does not imply that nature lose salary. For the source of income, its origin is in the company ".

Moreover, must take into account two aspects of the economic benefit: that obtained on exercise of the options, nature having salary and later by the sale of shares is not considered salary:

In this sense, STS stands for 26 January 2006:

"... The Board considers appropriate to recall that, as aforementioned sentence dicenuestra 1 October 2002 ( RJ 2002, 10666) (rec. 1309/01), of the share purchase options can derive two different economic advantages or profits, and only one of them can, if, be considered as wages and therefore included in the calculation of severance pay. The first utility, which is to be considered if assigned salary in return for work done, is' ​​constituted by the difference between the share price on the market at the time of acquisition and the exercise price of the right agreed ». The second utility, that occurs outside the framework and the working relationship, and accordingly lacks the condition of salary, is obtained by the worker, with a possible subsequent legal business entity with a third party, consisting of 'the sale of the shares acquired by exercising the option.' "

Employment purposes, salary is cash (and not considered the Income Tax Act as payment in kind) in that it conveys a true heritage and specific monetary value, that the worker can realize, selling their shares.

What if the employment relationship is terminated?

Then, must distinguish the following cases:

  • In situations of voluntary resignation or dismissal, the employee loses the right.
  • In cases of retirement, death and temporary disability and permanent, maintaining that the extinction law has been through no fault of the worker's.
  • If an unfair dismissal, the worker shall be entitled to exercise their purchase options and then to extinction without necessary compliance with the requirement to remain in the company.

It is essential to assess each individual case it is very complex casuistry.

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