An employee ownership trust enables the company to be employee owned and is set up by, the company’s existing owners. This could be part of an exit or succession planning strategy or could be new business founders looking to start a new business that they wish to be employee owned.
The benefits of a business becoming employee-owned are:
The last few years have seen a dramatic increase in the number of businesses owned by Employee Ownership Trusts (EOTs) to the point where as at July 2023 there were over 1000employee-owned businesses in the UK.
What becomes clear very quickly in the deal process is that Employee Ownership Trusts (EOTs) are not designed as vehicles for onward sales. They work wholly on the principle that they benefit all eligible employees on the same terms, and while you are “on that bus”, you can participate in tax-free bonuses and dividends. If an employee leaves employment, then the bus simply carries on its way.
Are you thinking of making your business an EOT? Speak to a team member today to find out how best to proceed.
For more on benefits and possible tax requirements of becoming an Employee Ownership Trust (EOT), visit the BHP blog.
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