Business development and advice

Employee ownership

Employee ownership

Is employee ownership the right move for you and your business? If your company is based in Scotland, Co-operative Development Scotland can give you up to three days funded support via an experienced adviser to help explore your options.

Directors and staff of i4 Product Design at their Edinburgh headquarters.

What is an employee-owned company?

An employee-owned business is one in which the employees, rather than external shareholders, hold a significant stake (majority of shares) in the company. 

It's a business model proven to better engage, reward and attract staff.

It's also a succession planning option that allows you to exit your business at your own pace, safeguard jobs and achieve a fair price for your company. There can also be tax advantages in selling your to your employees.

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. 

Employees can either own individual shares directly, or hold shares indirectly through an Employee Ownership Trust (EOT). Many companies combine trust and share ownership in what's often called the hybrid model. 

The most common process, however, is to form an EOT, which purchases the shares from the owner. The Trust holds the shares on behalf of the employees. 

The management team still run the company, with the board of directors responsible for the success of the business.

Subject to certain conditions, the EOT also brings some tax advantages to both the owner as seller, and the employees.

Anderson Bell + Christie Architects
Employees and directors at Balhousie Glazing in Perth  Pictured Directors in centre Drew Hay (on left) with Malcolm Sweeney (on right)

What are the benefits of selling to an Employee Ownership Trust (EOT)?

Employee ownership gives workers a meaningful stake in their organisation, together with a genuine say in how it is run.  It roots business in Scotland, drives performance and boosts economic well-being. 

You, your business and employees will benefit from: 

  • Get a fair market value for your business
  • Preserve your company location and culture
  • Avoid the hassle of a commercial sale
  • Keep existing management
  • Safeguard a family legacy
  • Exit gradually

How Co-operative Development Scotland can help

Co-operative Development Scotland (CDS), the arm of Scotland’s enterprise agencies that supports employee-owned businesses, can help you decide if employee ownership is right for you and your business.

We can also help you choose the model that works best for your company and provide support throughout the transition process.

Once you've submitted your enquiry, an adviser will be in touch to discuss your needs. To help them get to know your company, they will ask for a copy of your business plan and, if available, your company accounts from the last three years.

Employee-owned Guard Archaeology

Contact us

Want to learn more about employee ownership as an exit strategy? Get in touch and we'll help you explore your options.

Palimpsest Book Production Ltd, Falkirk

Know your options

To help you decide if employee ownership is the right exit strategy for you, we'll give you up to three days funded support with an experienced adviser. 

Together you can review all the business succession options available to you. 

What happens next?

If employee ownership is identified as a possible exit solution for you, we'll do an employee ownership feasibility study for your business. 

The report will examine potential ownership structures for your business, as well as the options for governance, management, funding and how a transition would occur. 

Read detailed information about setting up an employee-owned company in our FAQs.

Employee ownership masterclasses

Have you considered what will happen to your business when you’re ready to take a step back?  

Co-operative Development Scotland runs a programme of masterclasses throughout the year to give valuable insight into the benefits of employee ownership as an exit strategy for owners.  

Join one of our sessions to hear from specialist advisers and business owners who have first-hand experience of selling to their employees. You’ll have the opportunity to learn about the various succession planning options available and explore whether employee ownership is a good fit. 

The events are free to attend but registration is required.  

Get details of upcoming sessions 

New Hopetoun Gardens - an employee-owned business

Get insights with our podcast and video series

The Employee Ownership Podcast

Podcasts: employee ownership

Listen to business owners based in Scotland discuss employee ownership in our podcast series. Find out why they chose this option and how the change has benefited their companies and staff.

Co-operative Development Scotland logo

Video guide: Could employee ownership be good for your business?

Join Carole Leslie, a specialist adviser at Co-operative Development Scotland, as she explains the benefits of employee ownership and the process involved in switching to this business model.

Case studies: employee-owned companies

The employee owners of the Priory Hotel

How employee ownership is keeping The Priory Hotel part of the community

STAR-Dundee - an employee-owned space engineering company

STAR-Dundee: an employee-owned business with galactic reach

Jerba Campervans - an employee-owned company

Watch video case studies of more employee-owned businesses in Scotland