Tax-efficient investment in a start-up company

Question

My clients are four individuals seeking to invest in a tax efficient way in their new venture (‘the company’) which is a start-up software business. Currently the mother has incorporated the company and she and her long-term partner (the father) have the two subscriber shares. The other investors are their daughter and a friend who is also looking at setting up another business with the father through an LLP structure. Two key people will join as employees and the founders want to incentivise them with tax efficient share incentives. They may also want to issue share incentives to other people they recruit. The equity will initially be held as to 25% each by the mother and father 19% by the daughter and 31% by the friend. The employees will be...