Employee ownership trust solicitors

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Moore Barlow solicitors provide unparalleled legal guidance and support to businesses considering the shift towards employee ownership.

Our team of expert Employee Ownership Trust (EOT) solicitors is committed to navigating you through the complexities of EOTs, ensuring a smooth transition that benefits both business owners and employees alike.

With a focus on providing tailored advice and solutions, we aim to empower your business with the tools needed for a successful transformation into an employee-owned model.

What is an Employee Ownership Trust?

An EOT is a specific type of Employee Benefit Trust (EBT) designed to facilitate the transfer of a company’s ownership to its employees. An EOT represents a change in business ownership, where a trust acquires and holds a company’s shares on behalf of its employees.

This structure not only incentivises employees by directly involving them in the success of the business but also offers a dignified exit strategy for owners wishing to preserve their company’s legacy while ensuring its future prosperity.

Designed to cultivate a culture of collaboration, EOTs boost employee engagement and contributes to the sustainable growth of the business, aligning everyone’s interests towards common goals.

Jeremy Over

Jeremy Over

Partner | Corporate

023 8071 8025

How we can help

Our expertise in EOTs means we can offer a full range of legal services designed to facilitate your transition to an employee-owned structure. From the initial stages of planning and assessing the suitability of an EOT for your business to the intricate details of legal structuring and compliance, we provide a full seamless service tailored to meet your unique needs.
Our solicitors will craft the legal framework for your EOT, ensuring that the transition not only complies with English laws but also aligns with your strategic objectives. We work closely with accountants to maximise tax efficiencies.

Our commitment goes beyond implementation, establishment, and acquisition phases; we offer ongoing support to help navigate the operational realities of an EOT structure, ensuring its long-term success.

Who we help

At Moore Barlow we have experience working with a diverse clientele, including business owners seeking a responsible and rewarding exit strategy, employees aiming to understand their new role in an EOT-owned company, entrepreneurs interested in building a collaborative business model from the ground up, and established EOTs in need of expert legal advice to address the challenges of governance and compliance. Our approach is always tailored to the specific circumstances and goals of each client, ensuring relevant and effective legal solutions.

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Why choose us?

Selecting Moore Barlow solicitors for your EOT legal needs means choosing a partner who deeply understands the value of employee ownership. Our team stands out for its vast legal expertise in EOTs, demonstrated through a track record of successful transitions and satisfied clients. We pride ourselves on our personalised approach, ensuring that every solution we provide is customised to the unique needs of your business. Our dedication to excellence in service and outcomes is unwavering, reflecting our commitment to not just meet, but exceed your expectations.

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Frequently asked questions

How does an employee ownership trust work?

An EOT acquires a significant portion of a company’s shares, holding them on behalf of the employees. This structure aims to incentivise employees, aligning their interests with the business’s success, fostering a collaborative work environment, and facilitating a smooth ownership transition.

EOTs can enhance employee engagement, attract and retain talent, and ensure a stable and progressive transition of ownership that secures the future of your business.

To set up an EOT, establish a trust deed, decide on the share acquisition structure, secure funding for purchasing shares, transfer shares to the trust, and create an employee benefit scheme, selecting a trustee for the EOT, ensuring compliance with legal and tax requirements throughout the process.

Financing the sale to an EOT can be achieved through various means, including seller financing, external borrowing, or a combination of both. An EOT is commonly funded through company contributions, which are often generated from profits. These contributions are used to buy shares from selling owners, enabling the transition of ownership to the trust for the benefit of the employees.

We do not offer any tax advice and you are required to obtain independent tax advice. However, the transferring ownership to an EOT can offer the following  tax advantages:

  • Selling Shareholder (Owner): Transferring shares to an EOT is exempt from capital gains tax, potentially saving up to 20%. Additionally, gifting shares to an EOT qualifies as an exempt transfer for inheritance tax purposes.
  • Employee: The EOT can distribute annual bonuses of up to £3,600 per employee, which are exempt from income tax.
  • Company: The company can claim a corporation tax deduction equivalent to the value of bonuses paid through the EOT to employees.

These benefits make setting up an EOT an attractive option for both owners looking to sell or transfer ownership and companies wishing to incentivise employees through tax-efficient bonuses.

The duration of the transition varies depending on the complexity of the business and the specifics of the transaction. Our team works diligently to ensure a smooth and timely transition.

While most businesses can transition to an EOT, the suitability and benefits may vary depending on the structure. Ensure your company structure is suitable for an EOT. Moreover, private limited companies are most suitable, as they allow for the sale of shares to a trust.

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