Employee Ownership Explained
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.
This page gives a straightforward overview of what an Employee Ownership Trust is, how ownership works in practice, and why the model has become an important business exit route in the UK.
What is an EOT?
An Employee Ownership Trust (EOT) is a way for employees to collectively own a company in the UK. Here is a simplified explanation:
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.
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.
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.
Benefits for Employees
Employees do not own the shares directly but benefit from them. They may share in company success and often feel more connected to the business.
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.
Tax Advantages
There can be tax benefits for both the owner selling to an EOT and for employees, provided the structure qualifies and is implemented properly.
Equal Treatment
All employees should be treated on an equitable basis under the EOT model, subject to the relevant qualifying rules.
In simple terms, an EOT is a way to move ownership into a trust that acts for the benefit of employees, combining continuity, employee participation, and potential tax efficiency.
Did You Know!
£23+bn
Combined sales
The top 50 employee owned businesses in the UK have combined sales of more than £23 billion. Employee ownership has become a serious and established part of the UK business landscape.
2,400+
Employee owned businesses
There are more than 2,400 employee owned businesses in the UK and the number has continued to grow as more owners look for an alternative to a trade sale.
180,000+
Employees
The top 50 employee owned businesses in the UK employ more than 180,000 people combined, underlining the scale and relevance of the sector.
Talk to the Employee Ownership Experts
If you'd like to understand whether an Employee Ownership Trust could work for your business, we welcome confidential enquiries and are happy to provide initial guidance.
Contact UsRelated EOT resources
Continue your research with our core guides on Employee Ownership Trusts.
Read the EOT 101 guide
A plain-English introduction to Employee Ownership Trusts and how they work in the UK.
Compare UK exit options
EOT, trade sale, MBO and private equity weighed up across price, speed, risk and culture.
Get an EOT feasibility report
An independent assessment of whether your business is a strong candidate for employee ownership.
Browse the EOT Insights hub
In-depth articles on valuation, funding, governance and life after an EOT transition.