Employee Ownership Trusts (EOTs)
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 reduced 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.
Is an EOT right for you?
Find out whether an EOT is right for you. Take our EOT Readiness Assessment test.
Successful EOT transactions led by Initium
Talk with an EOT advisor
Selling your business to your staff 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.
Here at Initium, we are employee owned ourselves. As such we are perfectly placed to introduce you to this model. A proud member of the Employee Ownership Association, we have first-hand experience of what an EOT means in practice, and assist selected clients through the transition.
If you’re considering this route, we’d be glad 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
We’re passionate about the benefits of employee ownership. Whatever your timescales on an EOT, we are always happy to have an initial exploratory discussion on feasibility and potential next steps for your business.
Unlocking the power of employee ownership
In this exclusive webinar, we take you behind the scenes of a real-life EOT transaction.
