In our last post, we introduced the concept of an Employee Ownership Trust—what it is, why you might want one, and what those in-house conversations need to cover. If that sparked some interest around the boardroom table (or over that third cup of Yorkshire Tea), this one’s for you.
Because thinking about an EOT is one thing. Knowing where to start is another.
Step One: Talk Honestly About Your Aims
Start with a reality check—not with the accountant, not with your lawyer, but with your leadership team. What do you want this move to achieve?
- A smooth exit in a few years’ time?
- A legacy you can be proud of?
- Stronger staff loyalty and retention?
- A tax-efficient structure?
Write it down. Share it. If you’re not clear on your “why,” the “how” will wobble.
Step Two: Get Your House in Order
An EOT won’t fix a shaky business model. You’ll need:
- Solid accounts and a healthy profit track record.
- A clear corporate structure.
- A realistic valuation. (This is key—more on that below.)
- A team that can step up when ownership structures shift.
Think of it like selling your business to someone you care about. You want to hand over the keys, not the problems.
Step Three: Get Independent Advice Early
Yes, we’re lawyers—but this isn’t just about legal documents. You’ll also need:
- An accountant who understands how to structure the deal.
- A valuer who can fairly assess your business (not just what you think it’s worth).
- A solicitor who gets employee ownership and can walk you through the obligations, pitfalls,
and choices.
You’ll also need an experienced team to help you build the trust deed, manage the sale agreement, and put your new governance structures in place.
Step Four: Communicate With Your Team
This can’t be a surprise party. The way you introduce the idea to your employees matters.
- Be honest about what’s changing—and what isn’t.
- Explain how the trust works, how bonuses might be paid, and what being a beneficiary means.
- Be clear: this isn’t everyone getting shares or suddenly making decisions by committee.
Handled well, this can be a huge morale boost. Handled poorly, it can feel like a smokescreen for your own exit.
Step Five: Don’t Rush
Yes, the tax reliefs are attractive, but don’t gallop in just to meet a tax year deadline. This is a long-term strategic change, not a financial loophole.
Make sure:
- You understand the trust’s duties and limitations.
- You’ve considered succession planning and trustee appointments.
- The business can handle the debt if you’re selling over time through future profits.
An EOT can be a brilliant move—but it needs planning, clarity, and commitment.
Still Unsure? That’s Normal
This is a big decision. We’re not here to sell you a dream—we’re here to give you solid, tailored advice on whether an EOT is the right structure for your business and your people. If it is, we’ll help you do it properly. If it’s not, we’ll say so.
Because that’s what grown-up lawyering looks like.