Gary and Catherine Grant, founders of the UK’s largest toy chain, ‘The Entertainer’, have rewarded their staff with ownership of their multi-million-pound business. Via an Employee Ownership Trust, the company will be transferred into the ownership of the 1,900 members of staff, spread across 160 stores.
An employee ownership trust (an EOT), as the name suggests, is a trust established for the benefit of a company’s employees. The EOT is formed to acquire the controlling interest (being more than 50% of the shares) in the target company. The EOT will hold this controlling interest in the company for the benefit of its employees in the long-term.
The sale of a business to an EOT provides a tax efficient way for seller(s) to transfer ownership to employees to retain and attract ambitious employees. Whilst there are significant benefits to selling your business to an EOT, it may not be suitable for every business to use this structure and it is vital to ensure that the transaction is properly structured to minimise the risk for all parties involved and ensure a seamless transition takes place.
If you would like to discuss the sale of your business to an EOT, please do get in touch with one of the Corporate & Commercial team.
See full BBC article here.
