PM+M – the chartered accountancy, business advisory and wealth management firm – is reporting an upturn in enquiries from North West businesses which are looking to potentially convert to an employee ownership structure by selling to an Employee Ownership Trust (EOT).

PM+M cites the pandemic as being a key driver for the trend as companies look for ways to innovate and put their employees at the heart of their expansion strategies.

An EOT is an indirect form of employee ownership in which a Trust holds a controlling stake in a company on behalf of all its employees. They were introduced in the Finance Act 2014 as part of the coalition government’s aim of promoting employee ownership as a business model. Employee ownership companies in the UK include the likes of John Lewis Partnership and Richer Sounds, as well Arup and Parfetts which is headquartered in the North West.

Businesses opt for this model for a variety of reasons but because employees are co-owners, they tend to be more entrepreneurial and committed to the company and its long-term success. This, in turn, means more competitiveness, profitability, sustainability, and a greater commitment to corporate social responsibility and involvement with the communities they operate in.

Peter Kelly – director in the corporate finance team at PM+M – said:

“The pandemic has made businesses of all sizes reassess how they operate. Many now realise that their people are the backbone of their operations so implementing an EOT model is the next natural step in their evolution – especially as a combination of shared ownership and employee participation can deliver superior business performance.

“We expect more and more companies to explore – and ultimately adopt – this kind of structure as they focus on being as competitive as possible as the COVID recovery kicks in.”

On Wednesday 7th July, PM+M and Brabners are hosting a free webinar which will outline everything companies need to know about employee ownership and selling to an EOT. It will cover the practical and commercial aspects relating to EOTs with discussions around how they work, the tax implications and advantages of selling to an EOT, the size and growth of the EOT sector, and untapped succession opportunities for EO in the region’s SME market. Places can be booked here.

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