Traditionally, when business owners would start thinking about retirement or stepping back, they would for a buyer – either a competitor, an investor or sometimes someone within the current management. But if you want to secure the future of your business, protect its character, and make a different sort of choice, there is another option – employee ownership.
So, what is employee ownership?
In an organisation that is generally employee-owned a majority or a significant part of it is owned by or on behalf of all its employees.
There are three main forms of employee ownership:
- direct (shares held by employees individually), including worker co-operatives;
- indirect (shares are held in a trust); or
- a hybrid of the two
And how can this help the future of your business?
Benefits for the organisation can include high employee engagement, with a strong sense of collaboration and shared purpose. An employee-owned structure is a powerful incentive and can increase productivity, promote organisational growth, and lead to a stronger performing business.
For both owners and employees, an EOT provides tax incentives. Those selling their shares may do so free of capital gains tax and once a company is owned by an EOT, it can pay annual bonuses to its employees free of income tax.
For the business owner, leadership succession can be implemented over time and employee ownership can be implemented at a pace that suits them.
Nick Coley, MD at Fitzgerald Contractors said: “We think that employee ownership is ideally suited to Fitzgerald’s philosophy, and the thinking behind employee ownership has businesses exactly like ours in mind. When we were ready to go down this road, David and the team from Anthony Collins Solicitors made the process absolutely clear, explained the legal documents we needed, and worked really hard to make it happen in our timescale. We’re delighted to have made the change, and we’re very excited about the future for Fitzgerald.”
Interested in how employee ownership can help secure the future of your business? We will be hosting a webinar on October 6th, with Anthony Collins, which will provide you with everything you need to know about employee ownership and why it might be a good option for you.
The webinar will cover:
– Exploring why you might think about employee ownership;
– Hearing stories from a real-life business that converted in February this year
– Setting out the process of becoming employee-owned
– Examining some of the key issues.
Want to know more? – Secure your free space here.
Find out more about the how what and why of employee ownership here.