In June 2022, there were a total of *1,030 employee-owned businesses in the UK, but 2021 saw record growth with 285 new employee-owned businesses and the first part of 2022 saw similar growth.
Whilst many business owners may associate employee ownership with larger corporations, due to high-profile examples such as John Lewis, this can also be an appealing option to SMEs. In fact, in a 2017 report on The Employee Ownership Effect, evidence showed a stronger positive influence from employee ownership in smaller firms.
In this guide, we will aim to explain the rationale behind the increasing popularity of EOTs and answer some of the key questions that a business owner may have about EOTs, such as:
- Why choose employee ownership?
- How does an EOT work?
- What are the tax benefits (and implications)?
- How are EOTs implemented?
- What is the role of the Trust and Board?
- How do EOTs compare to alternative exits?
- What’s an EMI scheme and why are they often used in conjunction with an EOT?
Of course, there’s only so much we can answer in a generic guide, so professional advice should be sought that is tailored to your situation. At the end of the guide, you’ll find the contact details of our expert EOT team should you have any questions.
