Employee Ownership Trusts
What is an EOT?
An Employee Ownership Trust (EOT) is a very different kind of business sale transaction, whereby a business becomes majority owned by its workforce. First introduced by the UK government in 2014, the EOT is an increasingly popular solution for business owners seeking to sell their company.
It’s easy to see why. As an exit route, it’s tax efficient, as there’s no Capital Gains Tax to pay for you as a selling shareholder. More importantly, though, an EOT represents a chance for you to help reward the very people who have helped make your company great.
This is because under an EOT, your employees will assume control of the business. Without investing their own funds, all qualifying staff will gain a meaningful stake in the business moving forward – driving employee engagement, employee retention and securing a legacy for your business.
Find out more by downloading our free guide on Employee Ownership and the EOT model.
Is an EOT right for you?
This may sound like a win-win scenario, but an EOT won’t be right for every business. It requires sensitivity and deep understanding of both technical and cultural elements. Post-sale, there are also multiple factors to bear in mind.
M&A advisor BCMS became employee owned in 2022, and as such we are perfectly placed to introduce you to this model. A proud member of the Employee Ownership Association, we are the only corporate finance advisor to have first-hand experience of what an EOT means in practice.
We’d be happy to talk you through the key principles of an EOT, including:
- The core benefits for both seller and employees
- Transaction ‘moving parts’ from valuation and negotiation to compliance
- The importance of culture and communication
- Timelines, pre-transaction considerations and governance
If you feel an EOT is the right path for you, we can assist with an initial discussion on feasibility and next steps. Click here to get in touch.
Get in touch
If you feel an EOT is the right path for you, we can assist with an initial discussion on feasibility and next steps.