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Employee Share Schemes and Startups

21 January 2014 | Invitation to Comment

The Government is committed to addressing the concerns that have been raised by startups in relation to Employee Share Schemes.

The Government will commence direct consultations with interested stakeholders for two weeks commencing 28 January 2014. Consultations will be conducted in Melbourne and Sydney, with the option to hold teleconferences with those otherwise unable to attend.

These consultations will provide stakeholders with an opportunity to discuss their concerns in relation to the existing Employee Share Scheme arrangements for startups. While previous consultations have been undertaken, these discussions will focus on:

  1. the 2009 changes and their effects on businesses
    • If you were a startup prior to 2009-10, did you change your ESS arrangements following the 2009-10 Budget changes? If so, how?
    • What were the compliance impacts on your business of the new withholding and reporting requirements introduced in 2009-10?
    • Are there other impacts on your business from the changes in 2009-10?
  2. what are the barriers to offering an employee share scheme?
    • If you are a startup, do you offer shares or options through an ESS to your employees? What other benefits do you offer your employees? Are these sufficient to retain or attract the necessary employees? If you do not offer an ESS, what are the major reasons why not?
  3. what steps should be implemented to overcome these barriers?
  4. what would be the broader economic benefits in implementing these steps?
  5. what is a startup?
    • What are the key characteristics of the type of startup that is most likely to make use of an ESS?
  6. any other costs or issues associated with the implementation of an employee share scheme
    • What difficulties and costs do startups face in valuing shares or options for an ESS?
    • If you are a startup, do you use an independent valuation? Why?
    • As a startup, how often do you carry out valuations for ESS purposes?
    • Do you require a valuation of your startup for other purposes? What type/s do you use?
    • What difficulties do startups face with respect to corporate regulation of ESS?
    • Are there other regulatory requirements that impose costs or difficulties for startups wanting to offer an ESS?

Submissions closed on Friday 7 February 2014

Consultation Update

23 May 2014

Issues raised in submissions to this consultation process are being considered within the context of the Prime Minister’s Taskforce established to develop a National Industry Investment and Competitiveness Agenda, which is due to make recommendations to the Government by mid 2014. Information about the Taskforce is provided in the Prime Minister's media release dated 18 December 2013.

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