Employee Ownership Trust
Employee Ownership Trusts
An Employee Ownership Trust (EOT) facilitates the transition of a company's ownership to its employees.
The current owners establish a trust that benefits all employees, allowing this trust to take on the role of the primary owner of the company. This form of ownership provides significant advantages to both the employees and the shareholders looking to sell.
"If you are ready to sell your business, the EOT is the fastest, most effective and tax efficient way."
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Why an Employee Ownership Trust
Why this
Business owners have two options when it comes to exiting their business.
1) Stop operating and use the cash in the business to fund a pension – wasting the value of the business you have built through years of work.
2) Go for a sale on the open market with the uncertainty, time and stress that brings.
The EOT is a powerful option for selling your business with speed and certainty to a friendly buyer. The business you built will survive beyond you with employees now highly engaged and motivated while you get full value for selling. And the tax benefits are undeniable.
Why now
We have seen tax incentives for business owners be taken away rapidly. Entrepreneurs relief was cut from £10 million to £1 million suddenly in 2020.
Whether the tax incentives for the EOT sale remains in place if there is a change in government is unknown.
If you and you’re business are ready then take this opportunity to enjoy the results of your hard work.
If you’re business needs some work to function without you, selling to an EOT now can reserve the 0% capital gains tax rate while you can work to prepare the business for your exit.
Why us
We have developed our EOT Blueprint for making sure that the sale is delivered compliantly, on time and with the maximum benefit to you.
We understand that you want to know what is going on but not the details of each step. So we have built a fully done-for-you service that ensures you are informed and supported throughout the process.
We limit the number of business owners we work with on these sales to ensure you get the best experience.
Challenges and Solutions
Challenges
SUCCESSION ISSUES
You’ve built a successful business; now family members do not want to run it. So, you look to sell it on the open market. That leads to…
BUYER ISSUES
Will a buyer be the right fit to run the business? Will they have the same values, goals and objectives as you and your team? Even if you find a buyer, you still have…
TIMING ISSUES
The time from marketing to finding a buyer to agreeing a valuation to negotiating a contract to signing can be 12 months or longer. If you are willing to wait that long, you will have…
UNCERTAINTY ISSUES
4 out 5 small and medium business sales will collapse before completion. You can spend 12+ months on a deal and it could never materialise. If you manage to get through these issues, there is still one more thing…
TAX ISSUES
Selling your business will leave you with a big tax bill, even with entrepreneurs relief. You will lose hundreds of thousands of pounds in capital gains tax.
Solutions
SUCCESSION SOLUTIONS
You sell the business to the team members that have helped you build and run it. The team are more motivated and engaged and transformed into motivated owners You can be involved as much or as little as you need to be
BUYER SOLUTIONS
The buyer will be the EOT on behalf of your team. Negotiation is simpler and seamless. There will be no integration or cultural fit concerns. And there is zero interruption to the business.
TIMING SOLUTIONS
As there are no third parties to negotiate with, no solicitors to go back and forth over tiny details, the whole process can be kept on a timetable and completed quickly. We have completed EOT sales in as little as 4 months from being appointed to cash in the sellers bank account.
UNCERTAINTY SOLUTIONS
A virtually guaranteed sale. Once valuations are set and HMRC clearance is obtained (don’t worry – we do all of this for you), it’s a simple process of signing paperwork and completing the sale (don’t worry – we do all of this for you too).
TAX SOLUTIONS
Selling your company to an EOT means you will be 0% capital gains tax. You keep all of your sale proceeds.
Are you ready for a certain sale with 0% CGT
Take our 5 minute test to see if you are ready for an EOT.
"Want to sell your business? No buyer? No finance? No time? No problem."
Learn more about the Employee Ownership Trust
Download our Employee Ownership Trust information pack
Unlock the full potential of Employee Ownership Trusts for your business by completing our form to get access to our comprehensive EOT Information Pack!
