Understanding Employee Ownership Trusts
Learn how an EOT can offer tax benefits, preserve your company’s culture, and reward your employees with long-term ownership.
What is an EOT?
An Employee Ownership Trust (EOT) is a way for employees to collectively own a company in the UK. Here's a simplified explanation:
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What It Is: An EOT is a trust that holds a company's shares for the benefit of its employees. This means the employees, through the trust, become the owners of the company.
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How It's Set Up: A legal document called a trust deed is used to create the EOT and to set out its rules. The EOT is managed by trustees who look after the employees' interests.
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Buying Shares: The EOT buys or is given a majority of the company’s shares. This makes the employees, through the EOT, the main owners of the company.
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Benefits for Employees: Employees don't own the shares directly but benefit from them. They might get a share of the company's profits and feel more connected to the business.
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Running the Company: Even though the employees own the company through the EOT, the day-to-day management of the company usually stays the same.
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Tax Advantages: There are tax benefits for both the owner selling to an EOT and for the employees.
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Equal Treatment: All employees are treated equally in an EOT.
In short, an EOT is a way to make employees the owners of a company, bringing potential benefits like a happier workforce and tax savings. It involves setting up a trust to hold the company’s shares on behalf of the employees.
Did You Know!
£23+bn
Did you know that the top 50 employee-owned businesses in the UK have combined sales of over £23 billion? That’s a testament to the power of employee ownership in driving business success. At EOT.org.uk, we help businesses of all sizes and sectors navigate the transition towards employee ownership. We offer a range of services, from tailored advice to educational resources, to help you create a culture of shared success and long-term sustainability.
1400+
We are proud to be a part of the growing movement towards employee ownership in the UK. With over 1400 employee-owned companies and counting, we believe that this model is the future of business. As experts in employee ownership, we are passionate about helping UK businesses of all sizes transition to this model. From initial consultation to ongoing support, we are here to help ensure that your transition to employee ownership is a seamless one.
180,000+
Employee ownership is about more than just profits and dividends – it’s about creating a sense of ownership and engagement among workers, and allowing them to have a say in the direction and success of their organisation. The top 50 employee owned businesses in the UK employ over 180,000 staff combined. Studies have shown that employee-owned companies tend to be more innovative, productive, and resilient than their traditional counterparts.
We value your interest in employee ownership and are here to support you on your EOT journey. If you have any questions, need guidance, or simply wish to share your EOT experience or insights, we would love to hear from you. Please complete the contact form with your details and message. Whether you're confidential seeking advice, looking to contribute to our insights section, or just want to connect, reach out today and let's make employee ownership work for you.
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