10 Key Benefits of Employee Ownership…
Your business, as you know it, continues with minimal disruption, especially if you’re supported by specialist advisors who can help with governance, structures and shares.
You don’t need to find a buyer and convince outsiders of the value of the business; your employees will already be aware of its potential and will pay a fair price. A misconception is that selling to employees means selling at a discount.
There are tax breaks – introduced in the Finance Act of 2014 – when you sell to an Employee Ownership Trust (EOT), because the government recognises the value of EO businesses to the economy. These tax gains impact on both seller – exemption from capital gains tax – and individual employees, who can receive up to a £3,600 tax-free bonus every year.
You’re better positioned to negotiate exit terms and can design a model that suits you and the business best.
The business becomes innovative and pioneering: more great businesses are looking to employee ownership because the model fosters agility, adaptability and invention. This mind-set is ultimately better at future-proofing against upcoming challenges.
Loss of jobs in the community can be avoided; contractors and supplier relationships can continue, and plans will be executed only if the employees that know the business best think it’s the right thing to do.
You are rewarding your employees, demonstrating gratitude for their loyal and oftentimes long service.
The unique culture you’ve created won’t be diluted by those that don’t ‘get’ it.
You’ll have more flexibility to proceed at the right pace, plus negotiate any input you might have in the business going forward.
A workforce of owners is an engaged workforce, often resulting in increased productivity and growth. EO businesses commonly go from strength to strength, meaning that the best health your business has ever been in may be in its future.
Photo: shows our clients, Novograf, toasting their new EO status