Unlisted companies stand to reap the rewards of the Australian Government’s recent Employee Share Purchase Plan (ESPP) overhaul as part of the Federal budget. This follows changes we updated you on in January in relation to the long-awaited removal of cessation of employment as a deferred taxing point.

Until recently, the regulatory landscape has made it difficult for unlisted companies to not only increase employee ownership, but effectively utilise Employee Share Purchase Plans to attract the talent needed to grow their businesses.

These changes aim to give unlisted companies the ability to compete with international rivals and industry leaders in the battle for talent, thanks to a new fixed cap of $30,000. In addition, the cap will not apply where employees stand to profit from the sale of the business or an IPO. These companies will also benefit from reduced regulatory burden thanks to simplified disclosure requirements surrounding ESPPs. The purchase of shares or granting of options will require the company to submit a simplified disclosure statement, and where any employee is offered shares at no cost, the company will not have to provide disclosures at all.

Reducing the regulatory requirements for Employee Share Purchase Plans opens the door for more unlisted companies to establish an Employee Share Plan, and companies with existing schemes also stand to benefit from an increase in participation and ability to be competitive in the battle for talent.

Computershare welcomes this positive change for our industry and congratulates parliament on passing more legislation to support usage of employee share plans as a key tool for talent acquisition and retention.

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