A business is generally “employee-owned” where the whole, a majority or a significant part of it is owned by or on behalf of all its employees
There are three main forms of employee ownership, it can be direct (shares held by employees individually), indirect (shares are held in a trust) or a hybrid of the two.
Here are links to guide pages for each of these:
Generally, trust ownership will be simpler both to set up and run. But this does not make it the automatic best choice for all companies.
In 2014, the government introduced two new tax reliefs intended to encourage more companies to adopt employee ownership. In the past five years or so since then, over 400 UK companies have become owned by an employee ownership trust, mainly as part of an ownership succession plan for their founders, but they also include public-service spin outs, start-ups, ownership change as part of growth and expansion plans or as a route to recovery following insolvency or closure threat.
Watch the video below to hear Robert Postlethwaite explain what employee ownership means in more detail.