If you are even beginning to think about an employee ownership model for your business then it may well be the case that such a model is the natural next step for you. But before progressing with it, it is worth checking through some characteristics that might be regarded as hallmarks of an EO business.
Advantages to becoming employee owned
An early decision to make will be the extent to which the owners of a business wish to transfer control. There are tax advantages to doing so, provided certain conditions are met. So for a tax advantaged employee ownership structure, the business needs to be:
- under the control (more than 50%) of the employees
- structured with more than five employees per two owners
- a trading company (as opposed to an investment company)
- for the benefit of all employees and on the same terms
- free of any loans to employees
We can help businesses assess their eligibility for a tax advantaged employee owned model as well as offer pre-transfer planning for those businesses that do not quite meet those (or a few other relatively minor) criteria.
Hallmarks of an EO business
Since becoming employee owned in 2016, we have helped many businesses transition to release the benefits that we have also experienced in our business. Hallmarks that are more of a “gut feeling” for businesses that have sought our help include:
- transparency with employees
- engagement with the values of the business/those of the employees
- engagement with all stakeholders (including the wider community)
- frequently, a “people” business
- a good management team
- a simple structure
- in the middle of the war for talent
Like the elephant, it may be difficult to describe, but when you see it, you know what it is. The EO business model often feels like being the next natural step for a business. We can help you take that step.
If you would like to discuss how employee ownership could work for you, please get in touch and our expert EO team would be happy to advise you.