Employee Ownership Trusts

I work with the team at Mobius Group to help business owners take the step into the world of Employee Ownership.

We manage the process from start to finish to make the transition as smooth as possible.

What is an employee Ownership Trust?

An Employee Ownership Trust (EOT) is a specific type of employee ownership
structure in which a trust holds a controlling stake of the shares in a trading limited
company on behalf of its employees.

EOT’s were first introduced following legislation in 2014 to encourage employee
ownership, by business owners of a company selling a controlling interest of their
shares.

What are the Key Features of an Employee Ownership Trust?
  • The EOT holds the shares sold in the company, not the employees directly.
  • The employees collectively benefit from the trust, rather than owning individual shares.
  • The EOT is controlled by Trustees appointed by an EOT trust deed which are typically the selling shareholders together with an independent Trustee.
  • Many business owners have built up their business from scratch, and it can be important to them to maintain their legacy which an EOT can provide through continuous trading.
  • Selling shareholders can qualify for Capital Gains Tax relief on 50% of the gain if the business sells a controlling interest to an EOT.
  • Companies controlled by EOTs can pay employees income tax-free bonuses of up to £3,600 per year.
What are the Benefits of an EOT?
  • Succession Planning: Helps business owners exit while preserving company independence.
  • Employee Motivation: Proven to boosts engagement and productivity.
  • Business Stability: Reduces risk of company being sold to competitors or broken up.
  • Cultural Preservation: Retains the founder’s values and mission.
  • Key employees retention: This can be achieved through setting up profit share incentives.
How can we help?

The approach is very much designed around making sure business owners and management teams understand all the options available. No two businesses are the
same. The aim is to create the best possible structure that not only meets the needs of the business owners but ensures that the management team and employees are engaged and supportive. In fact, the management team and employees should be highly motivated and excited.

With you the entire way…
  • The process starts with a free consultation to explain in more detail that employee ownership is about and how it works in practice.
  • Secondly, we produce a feasibility study which covers all aspects of a potential sale to an EOT and we really get to know what business owners want and ultimately design the most beneficial EOT possible.
  • Thirdly, we fully project manage the transaction, including assisting with any internal and external communications as appropriate.
  • Finally, we can act as an Independent Trustee helping to make sure that the new Employee Owned business goes from strength to strength.

Ready to explore an Employee Ownership Trust?

Please get in touch for further information or to arrange a no obligation discussion to see if this is an option for you.

Get in touch