Deal Completed – 2023 Hawsons Corporate Finance had the pleasure of supporting Hi-Tech Automation Limited (“Hi-Tech”), a well-established automation intelligence company, during its transition to Employee Ownership. The company, based in Kettering, Northamptonshire,...
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Who funds an Employee Ownership Trust?
Funding an EOT To fund an EOT transaction, the business would generally utilise surplus cash held in the business as initial consideration, whilst deferring the remaining amounts payable (typically paid in monthly installments) throughout a pre-defined future period...
How does an employee ownership trust (EOT) work?
Basics of an EOT An EOT is a trust that acquires shares in a company which are then held on behalf of the employees. It is an increasingly popular exit strategy for shareholders which offers attractive tax incentives and peace of mind over the future of the business...
Employee Ownership Trust (EOT) Benefits for Employees
In this article, we are going to discuss the benefits to employees of a company owned by an EOT, compared to a more traditional limited company or partnership. What does being in an EOT mean for an employee? Employees of a trading company (or group) owned by an EOT do...
Trustees and their role in an Employee Ownership Trust
Who are the trustees of an employee ownership trust? The trustees are the directors of the corporate trustee company which holds the shares in the trading company/group. Their role is to ensure that the company is being managed (by the directors of the trading...
Employee Ownership Trust accounting treatment
Accounting treatment of an EOT The EOT becomes the owner of the company, usually via a corporate trustee company (“the Trust”) set up to hold the acquired shares. The trust is administered by trustees on behalf of the employees, these trustees are statutory directors...
Employee Ownership “Dividends”
How are profits distributed following EOT ownership? EOT’s are a form of indirect company ownership and as such dividends would not get paid directly to employees should they become payable. When profits and cashflow allow, a contribution can be made to the trust...
Employee Ownership Trust Disadvantages
Disadvantages of EOTs for business owners EOTs are still a relatively modern concept and one which may seem quite overwhelming to some business owners. If not structured correctly, an EOT disposal could see exiting business owners waiting too long for their...
Why use an accountant as your lead EOT advisor?
If you are considering selling your company to an EOT, we would always advocate the use of a Lead EOT Advisor on your transaction but what is one and what do they do? What does it mean to be Lead EOT Advisor? The Lead EOT Advisor will oversee and manage the entire...
EOT Case Study – Essential Recruitment
The Hawsons Corporate Finance team acted as lead advisors for Essential Recruitment’s move to employee ownership. Essential Recruitment specialise in the supply of temporary and permanent staff to industry and commence. The company was founded in 2006 and now operates...
Why are retailers facing staff shortages?
Retail staff decrease Retailers have now resumed trading as they seek to get business back on track following the forced closures of the pandemic. However, since their return, they now face a new challenge, staff shortages. Recent data shows that in the second quarter...
UK’s independent stores record first rise in four years
Due to 5,251 chain stores closing during the first half of 2021. Many independent retail stores have decided to fill the gaps left resulting in the first rise in independent stores for the first time in four years. A new total of 804 independent retail stores opened...