Employee ownership is the exit plan that allows you to exit your business at your own pace, safeguard jobs and improve employee engagement. It allows you to achieve a fair price for your business and there can be tax advantages in selling your business to your employees.
What is an employee owned business?
An employee owned business is one where the employees, rather than external shareholders, hold a significant stake in the company. The employees would have an individual shareholding, or hold shares indirectly using an Employee Ownership Trust. Many companies combine trust and share ownership in what's often called the hybrid model.
How does employee ownership work?
There is no one model of employee ownership. The structure can be shaped to fit with your company and your aspirations as an owner. The usual process is to form an Employee Ownership Trust, which purchases the shares from the owner. The Trust holds the shares on behalf of the employees. The company’s management still run the company, with the board of directors responsible for the success of the business.
An ideal exit strategy
Employee ownership brings many benefits for you, the business, and the employees.
What are the benefits?
- Competitive price and guaranteed exit for the owner
- Safeguarding the future of the business
- Ownership and leadership transfer at low risk
- Enhanced employee engagement
- Increased productivity and innovation
- Attracting and retaining high-quality talent
Co-operative Development Scotland
This service is run by Co-operative Development Scotland (CDS). CDS helps companies and communities grow with two innovative business models: collaboration and employee ownership.