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What is an Employee Ownership Trust?

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   Employee Ownership Trust

Flexible

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Private

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Simple

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Low Cost Legal Structure

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One of the largest department stores in the UK has been employee owned for almost 100 years! That company is the John Lewis Partnership, and it is what is called an Employee Ownership Trust, or an “EOT”. An Employee Ownership Trust is a simple, inexpensive way for a retiring or leaving business owner to transfer the business to her or his employees. It makes use of a “Purpose Trust”, a long-standing legal structure, often used by families to protect their assets.

With an EOT, an owner can strike a fair price with the employees and transfer the business to them. The owner(s) get compensation for their asset, and now the employees collectively own the business, and have real financial futures. The shares of the company are held in a trust and the profits of the business are now shared by the employees.

An Employee Ownership Trust (EOT) allows a company to remain employee-owned in perpetuity or for as long as desired, preserving the owner’s legacy. 
 

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