EO Day stories: New service helps businesses convert to employee ownership
Two South West advisory firms have joined forces to offer a new service to help businesses to convert to employee ownership.
EOA member Stephens Scown LLP, the first large law firm in the UK to become employee-owned, and consultants BoardroomAdvisors.co.uk are offering a one-stop service to help companies make the transition. They believe an ‘employee buy-out’ could be the ideal solution for founders looking to exit their business in the post-Covid world while keeping the interests of employees at heart and, provided it is structured in the right way, is currently free of capital gains tax.
Employee-owned businesses – which include the likes of John Lewis and Richer Sounds – have also been shown to be more productive and successful.
Damian Lambkin of BoardroomAdvisors.co.uk said: “Employee ownership is perfect for the post-Covid world. It fits well with the focus on social responsibility and offers advantages over a trade sale or buy-out. There is no need to find a buyer or investor, or spend months negotiating while the other party chips away at the price.
“The business is sold at full price and there is no Capital Gains Tax to pay. One of the most appealing aspects is that the founder has more power to safeguard the future of the business and protect their legacy.”
Stephens Scown, one of the region’s leading law firms with offices in Exeter, Truro and St Austell, set a precedent in the legal world when it became the first large law firm to become employee-owned in 2016. It advises businesses on the legal issues associated with employee ownership.
Christian Wilson, partner and specialist in employee ownership, says: “The coronavirus pandemic has generated a lot of discussion about the best way of doing business once it is all over. There is a sense that business needs to be about more than profit alone. People, purpose and planet are becoming more important and employee ownership is an option which delivers these.
“Most business owners I know are concerned about their employees and want to make sure they are taken care of in any exit plan. Employee ownership as a succession strategy has employees at its heart. It also helps to preserve a legacy for the original founder.”
John Courtney CEO of BoardroomAdvisors.co.uk says: “Many baby boomers who have reached retirement have held back from selling their business due to uncertainty in recent years and a deep recession might encourage others to sell up too. Employee ownership could be the perfect solution for owners and staff alike.”
BoardroomAdvisors.co.uk supports companies’ scaleup, growth and succession strategies and will now advise and support them in the transition to employee ownership, with Stephens Scown providing legal advice.