What employee participation models are there? – Lichtenstein
VADUZ – employee participation models can be designed in different ways and therefore also have different consequences. Various goals are pursued through employee participation models, and this can promote a connection to the company goals and company development on the part of the employees. Both on the employer and on the employee side, this can have a motivating effect and promote joint interaction.
In order to answer the question as planned, it is assumed that the employer operates as a Liechtenstein stock corporation (AG).
Employee participation models can be designed as a purely contractual participation in the profit and/or liquidation proceeds of the employer, and can extend to shares with voting rights. These are basically divided into “real” and “false” employee participation schemes. Employee shares and employee options are to be subsumed under “real” employee participation.
A company can, for example, provide for the issue of so-called working shares to the employees. Employee shares can be issued to employees without paying the contribution. The contribution will be made later by offsetting against the dividend entitlement of the working share. As soon as 25% of the working shares have been paid in, the capital increase resulting from them will be entered in the commercial register and the voting rights of the respective shareholder will begin from this point in time. After full payment of the working share, this will be exchanged for a “normal” share.
The issue of option rights is another option for employee participation. Employees receive an option right that they can exercise at a later date. This option right relates to the future acquisition of shares or participation certificates in a stock corporation. When exercising the option, an employee has to make the contribution (plus any premium) for the shares or the participation certificate.
“False” employee participation models are “false” in the sense that, for example, no share ownership is granted. Reference is often made to “phantom shares” or “virtual stock” because this form of participation does not actually allow participation in the employer’s equity. The claim thus corresponds to a contractual nature. An example of such a false employee participation is given by the creation of participation certificates in favor of employees, which can be provided for by the statutes of a Liechtenstein company. The employees (as holders of participation certificates) are only entitled to a share in the balance sheet profit, the liquidation result, or the subscription to new shares. The participation certificates carry no membership rights and are a contractual claim of the employee against the stock corporation. Therefore, no deposit is required.
Depending on the employee participation model selected, there are various social security, labor law and tax consequences that must be taken into account before deciding on an employee participation model. We would be happy to advise you on both the employer and employee side in order to discuss the appropriate employee participation model and to show the consequences.
FURTHER INFORMATION
Lawyer Mag. iur. Fabienne Seppi
(approved in Liechtenstein and Austria)
NÄGELE Rechtsanwälte GmbH
dr Grass Strasse 12, 9490 Vaduz, Liechtenstein
Phone +423 237 60 70
Fax +423 237 60 71
www.naegele.law