Employee ownership - what’s the attraction?

What do Aardman animation, John Lewis and Richer Sounds have in common?

The answer is that they each have employee ownership of one form or another.

There is a growing movement towards employee ownership as a business model which also has incentives for business owners.

Employee ownership as the name suggests involves the employees having an interest in the company, although this is usually through a trust rather than direct ownership of shares.

But what are the benefits?

Greater employee engagement

As the employees gain a stake in the business, they are incentivised to stay and benefit from the growth they help create. Employee owned companies also create a motivated working environment as employees are involved in the management of the business.

Independence

If a company is mainly or wholly owned by employees, ownership of the business remains with the people who work in and know the business best. It is also rare that they would decide to sell the company.

Exit route for owners

The transition to employee ownership has some key advantages for business owners looking to sell their company. Some advantages relate to tax but it also allows an owner to know who they are selling to and provides reassurance that the business they have worked hard to build up will continue for generations to come.

Setting up an employee ownership business model requires specialist advice as there are various structures that can be put in place to achieve this. If you would like to discuss a transition to partial or total conversion to employee ownership the Legal 500 recognised Corporate & Commercial team at Wilson Browne Solicitors have all the help you need.