The Benefits of Employee Ownership How to Implement it

Employee ownership is a relatively new concept whereby a company is owned entirely by employees as opposed to a limited company or a partnership. Finding legal advice around this issue can be challenging given the few companies that actually implement it.  

There are numerous benefits and if you are looking to develop a retirement plan or exit strategy transferring ownership to your employees could offer a great way. Keep reading for advice on the legal steps for developing employee ownership and how to implement it.

Benefits of Introducing Employee Ownership

Some of the benefits of employee ownership are the levels of motivation that it can instil into your workforce; they are much more likely to strive to do their best if they have a financial vested interest in the business.


IF you have an emotional or sentimental attachment to your business you will be pleased to know that with the right legal advice employee ownership allows your business to continue operating without you, protecting your legacy.

Create an Employee Stock Ownership Plan

The first step to implementing employee ownership is to establish a robust stock plan. The idea of this is to give your employees a vested interest in the company going forward. This is done through the distribution of voting rights which then allows your employees to form a board of directors.

It is essential that you hire a business lawyer to complete this step or at least get some expert corporate legal advice. Failure to do so could lead to disruption in your company and issues for you down the line.

Organise the Business Structure

Once the main tool is in place for employee ownership the next step is to re-organise your business structure. This will give your company clarity on the roles of employees as new owners in a business. This step’s complexity will depend on the size of the organisation and the flatness of the management structure.

Implement the Changes

Once you have restructured the company and set up a new stock ownership plan the final step is to fully implement the changes. Whether you are looking to ensure the survival for your company post retirement or are looking for a new challenge it is important to seek good legal advice before you put into place any of the changes mentioned in this article.

Find expert legal advice on changes to your business

If you are looking to implement employee ownership in your business hopefully it is clear that you must do so in accordance with the important legal principles in corporate law. Contact the experts at Halebury today for consultation on how to implement employee ownership in your company.

Please follow and like us:
error

Leave a Reply

Your email address will not be published. Required fields are marked *