Employee buyout

[Jumpingjackflash]

Hello

Why would a company have an employee buyout?

[barryrs]

Owner wants to retire?

[blindspot]

No CGT on sale to an employee owned trust..

[PugwasHDJ80]

Jumpingjackflash said:

Hello

Why would a company have an employee buyout?

What do you actually mean- could be all sorts of things!

[Jumpingjackflash]

I was talking with the owner of a competitor and he said the company was in the process of a employee buyout. I am ignorant regarding selling a business as I have never done it but my gut feeling was that everything was not as successful as presented on the outside.

[Fat hippo]

Staff know the business and willing to take ownership over.
If sell to an outsider they could make changes that alienate customers.

Selling to the management is likely to lead to higher morale and if the sale is structured with an earn out/ deferred consideration then that could lead to a better return

[stuthemong]

blindspot said:

No CGT on sale to an employee owned trust..

This.

[22]

I run an employee-owned company. Founder had tried to sell commercially (went badly), considered a typical management buyout (no funds/appetite), so the employee-owned trust format worked for everyone.

Founder sold tax-free, company can pay tax-free bonuses - absence is low, it's a badge of honour for many, the concept is lovely. We pay the agreed price from trading profits - but 100% of the firm was owned and controlled by the workforce from day one.