Employee Ownership (EO) is a growing succession solution in the UK. It anchors jobs and investment in communities, supports long-term growth, and provides owners with a flexible and rewarding exit.
Succession planning - for those looking to sell their shares in their business in the UK - is essential to deliver more robust economic resilience in the UK. For founder/owners, a succession plan that gives you the business exit and financial future you need is equally essential.
Top benefits of Employee Ownership when selling your business
If you’re planning your succession, selling your business to an Employee Ownership Trust (EOT) is a proven way to protect your legacy, reward your employees, and secure long-term growth. Here are the key benefits of employee ownership:
- Significant Tax Advantages. Selling to an Employee Ownership Trust (EOT) can significantly reduce the amount of Capital Gains Tax owed. This makes EO one of the most financially efficient succession options. This feature aims to offset a common arrangement of where the owner is paid via deferred considerations (over an agreed period) rather than in one lump sum.
- Protect Your Independence. Employee ownership keeps your business independent, safeguarding it from being absorbed by competitors and ensuring decisions are made with the long-term future in mind.
- Secure Local Jobs & Communities. EO keeps your business rooted in its community, protecting good jobs and supporting the local economy. Plus, the EOT also offers the ability to pay a tax-free bonus of up to £3,600.
- Preserve Your Culture & Values. An EOT ensures the ethos, culture, and values you’ve worked hard to build live on — creating a meaningful legacy for your business.
- Boost Performance & Growth. The report People Powered Growth details how EO can drive productivity and performance, as well as lots of ‘good business’ impact that’s that are desirable and meet the values of the business owner. EOA membership and our learning & development programmes through EO Learn are designed to support EO excellence and dial up those impacts.
- Choose a Flexible Ownership Model. Employee ownership isn’t one-size-fits-all. Not all employee ownership is via an EOT. Some employee ownership is via direct shares. The EOT offers flexibility to structure a hybrid model of both types of employee ownership to suit the needs of the business, meaning majority employee ownership can sit along either other ownership stakes, charitable trusts, or to retain some family our other ownership in the business.
- Exit on Your Terms. EO offers a different exit – our members often tell us that the business is their ‘baby’. The EOT offers a gradual, supportive exit and can see them take a different role in the business and exit over time, rather than a ‘cliff edge’ retirement.
Exploring Employee Ownership with the Employee Ownership Association
The eoa exists to promote awareness, collaboration, expertise, and support of employee ownership. If you are taking your first step discovering the huge range of benefits of EO, the eoa is here to help.
- We can help you explore if EO Is for you and develop your EO Plan
- We have supported thousands of founders and know the key considerations and where to sign-post you to support the transaction but also the practices you need to build in the business to deliver a successful transformation. Find out about membership.
Why the EOT is a Popular Succession Solution
The Employee Ownership Trust (EOT), introduced in 2014, is a proven succession plan that delivers owners the exit they want as well as sustaining what they built for future generations.
There is often confusion between employee ownership and employee ownership – both give employees a stake in the business, but employee ownership is different – find out more about what EO is.
Employee Ownership has grown in popularity and has acted as a catalyst to grow the EO sector; from about 140 businesses to about 2,400 as of July 2025, now seeing at least one transition a day. Read more about the growth and impact of employee ownership.
While interest is often driven by incentives, survey data suggests that the most popular reasons for businesses becoming EO is the drive of the owners to ensure the survival and independence of the business. See our current featured case studies which include why and how these businesses became employee owned.
All the efforts business founders and owners put into developing a business, means that equal consideration and efforts should go into who owns it next.
Why EO Succession Needs Awareness and Educations
Increasing need for robust succession plans show in a report on succession:
- Over two thirds of older owners of small and medium-sized businesses (10-249 employees) intend to sell or divest their shareholding over the next 10 years (indicates owners at 120,000 SME firms)
- Of that group, 43% predict the business will need to find completely new owners or face closure (indicates 51,600 SME firms).
- 17% of all older owners of SME businesses (10-249 employees) predict liquidation is the likely eventual outcome (indicates 30,000 SME firms employing an estimated 910,000 employees)
- Succession planning in the UK is weak – yet we have a business retention problem, only 30% of family businesses make it to a second generation, just 12% make it to a third.
Find Out More
The eoa is here to help you at any stage of your EO journey.
From a first anonymous discussion to answer your questions, through to joining as a member, attending a free webinar, taking an eo Learn course, or seeking support from our expert Supporter Members; it’s all here, ready to explore.
Discover more about our thriving EO community.