Below is a brief guide to how a company can be employee-owned through an employee trust.
In some employee-owned businesses, the ownership is indirect through an employee trust which owns all or most of the shares on behalf of employees as a whole, with no single employee ever holding shares personally. This is how companies like John Lewis and Arup have structured their employee ownership.
This form of ownership has the advantage of simplicity, as it avoids the need to issue shares to new employees and buy them back from leavers or employees who simply wish to sell. Rather than being paid out to shareholders as dividends, profits can be shared with employees by way of bonuses. If the trust is a statutory employee ownership trust which owns a majority of the company, bonuses can be paid income tax free.
Our Guide to becoming an employee-owned company compares individual with trust-based employee ownership.
If you would like to explore how employee ownership might be introduced in your company, please contact us for an initial discussion.
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