What is an Employee Ownership Trust and is it the right choice for me?

If you’ve got at least eight to 10 members of staff within your business, who’ve been with you for at least two years or more, and are likely to be with you for many years to come, then an employee ownership trust might be well worth considering. You’re going to probably already have a strong management team who already run the business with little input from you. Or, if you don’t, then you need to allow yourself plenty of time to find and train up individuals for these new roles, which they’re going to have in addition to their current responsibilities.

You will also not have any requirement for full payment of your shares within three years, and you’re going to have to be happy to take on the drip. The payment you’re going to receive is likely to be significantly lower, or over a much longer time period, than if you’d sold to an external buyer. You also have to be happy that you’re going to lose control of the business and it’s going to be run by trustees instead of yourself. Otherwise, it’s probably worth looking at.