Employee Ownership Trusts (EOTs)

In recent years, the UK has seen a growing trend in businesses moving towards a shared-ownership model, such as employee ownership trusts or EOTs. The EOT structure allows existing business owners to either totally exit, or take a step back from, their business. Shares in the company are then transferred to a trust and held for the benefit of the employees as a whole.

As well as increasing employee engagement and maintaining the culture and ethos of the business, significant tax advantages in place for both employees and the existing business owner.

If you are a business owner interested in transferring some or all of the share in your company but is reluctant to sell to a third-party buyer, you may consider establishing an EOT so that the shares in the company can be held for the benefit of your employees.

The corporate team at JMW Solicitors is a member of the Employee Ownership Association (EOA) and has gained expertise in advising businesses on the legal and commercial issues surrounding the establishment of employee ownership trusts. We have the experience and connections to assist at each stage of the sale and transition process to ensure that it is completed efficiently, while protecting the interests of all stakeholders.

Find out more about how the corporate team at JMW can assist you by calling us on 0345 872 6666. You can also complete online enquiry form to request a call back at a convenient time.

How JMW Can Help

We have experience advising on implementing the following schemes to create an EOT arrangement:

• Advising on pre-transaction reorganisations or restructuring
• Assisting with the incorporation of the employee ownership trustee
• Drafting the trust deed to set out the way that the trust will be managed
• Drafting the documents to effect the transfer of the shares to the employee ownership trustee
• Drafting constitutional documents to manage the relationship between the trust, the founding shareholders and the company itself going forward

JMW’s corporate team has assisted a number of companies in putting in place an Employee Ownership Trusts structure. By working with your tax advisors, we ensure that transactions are progressed efficiently and in line with HMRC’s requirements.

Case Studies

JMW Solicitors Advises I-COM on Becoming Employee-Owned

I-COM appointed JMW to provide advice on the transaction structure and handle the establishment of the EOT after hearing of their involvement in a similar deal for recruitment and payroll services firm, Kinetic.