Co-operative Development Scotland recently took a delegation of employee-owned businesses and advisors to the Employee Ownership Association’s Annual Conference 2013 in Birmingham.
Euan Ferries, Corporate Advisory Director at professional chartered accountants French Duncan LLP shares a brief account of the day.
We had a great time at the Employee Ownership Association’s Annual Conference 2013. The large number of attendees and exhibitors clearly demonstrated the increasing popularity of employee ownership (EO).
EO is now very much viewed as a viable alternative to other exit mechanisms such as trade sales and management buyouts. This is demonstrated through the established EO transaction structures including the increasing availability of funding geared towards EO such as mini bonds and specialist capital providers. The sheer number of employee-owned and aspiring EO businesses attending this year’s conference was further testament.
I particularly enjoyed listening to the real life examples of employee-owned businesses at the conference and seeing business journalists who have previously never spoken about EO, such as the BBC’s John Pienaar, now very much aware of it.
We all took a few good tips away with us from the conference including:
- Think: “culture first, legals later”
- Hybrid management structures are becoming increasing popular.
- And the original Golden ethos of “Do Good Work, Have Fun and make a Profit”!
It is likely that the popularity of the EO model will grow further in popularity with the support and tax breaks currently being considered by the Government.
The Autumn Statement introduced a new tax relief which will allow companies that are indirectly owned and controlled by an employee trust, to pay employees a tax-free bonus up to £3,600 from October 2014.
Owners who sell their shares to an employee ownership trust will be able to do so from April 2014 free of Capital Gains Tax, as long as controlling interest in the company remains within the employee ownership trust following the sale. In most cases this will save Capital Gains Tax at 10per cent.
These tax proposals should be a great incentive and improve productivity, so a ‘Win Win’ for employees, the business and the economy.
Here’s to many more EOs in 2014!