Staying in control of succession planning (and how an Employee Ownership Trust “EOT” might help)
February 24, 2021
As recent news starts to point to a road map out of the current lockdown and business owners and leaders start to have more time to think about “bigger picture issues” – one question that may raise its head is “do I want to keep doing this?”.
Whether this comes as a quiet, unexpected thought or a glorious realisation or even just as part of “good housekeeping” for your plans and ambitions ahead, it is well worth taking some time out to think about next steps for yourself.
For company owners, the extra dimension of what to do with the business can be the most off putting part of any considerations – as fewer and fewer exits are as “clean” as most owners would like. A frequent worry is how can I transition away from the business whilst not having to be tied in and told what to do by the new owners.
A sale of the business to an EOT can offer a way of retaining influence and direction over the business whilst exiting the business at your own pace. In comparison, alternatives such as a trade sale or private third party investment can lead to others dictating the future business relationship.
In addition, there are currently some very tax friendly rules surrounding EOT’s (including the potential of no capital gains on the sale of the business into the EOT by the current owners and the scope for tax free payments in the future to employees).
If you would like further information about the points raised in this article or would like assistance in considering whether an EOT might be for you, please do contact Stuart James.