EOT / Employee Ownership Trust
EOTs are an increasingly popular exit strategy for business owners. They can be tax-efficient while protecting the future of the company and its employees. However, they aren’t suitable for every business.
Employee Ownership Trusts (EOTs) are a tax-efficient, government-backed way for business owners to sell their company while protecting its long-term future and rewarding employees. By transferring ownership to a trust that holds the business on behalf of the workforce, an EOT allows companies to remain independent while giving employees a meaningful stake in long-term success.
In November 2025, Entrepreneurs Hub became an Employee Ownership Trust ourselves. This reflects our commitment to independence, long-term thinking and shared responsibility. Our future is aligned with the people who deliver our work every day — ensuring continuity, stability and sustained client focus.
While EOTs can offer significant advantages, they are not suitable for every business. At Entrepreneurs Hub, we help owners evaluate whether employee ownership is the right route and guide you through the process with clear, practical advice to ensure a smooth transition that protects your legacy and long-term business success.
Our membership in the Employee Ownership Association reflects our commitment to the employee ownership model and to supporting business owners considering this increasingly popular exit strategy.
Our Approach
Every business owner’s goals are different. Our approach is built around understanding what matters most to you and structuring the right solution to achieve it.
Our experienced team works alongside you throughout the process, combining strategic advice, financial expertise and structured project management to deliver a smooth and well-managed transition.
We support you with:
- Dedicated advice and consultation throughout the process
- Financial analysis, valuation support, modelling and forecasting with experienced CFO-level expertise
- Project management support, including coordinating the information and documentation required to complete the EOT process
Our role is to guide you confidently through each stage while protecting your interests and ensuring the transaction is structured correctly.
Key Benefits
“We brought in Entrepreneurs Hub to help us evaluate our exit options, and after careful consideration, we decided that an Employee Ownership Trust was the best fit for our situation. This structure allowed us to remain actively involved in the business while we focused on strengthening the new board, including recruiting a Managing Director to take the lead. As part of this process, we asked Entrepreneurs Hub to support us in that recruitment. They managed everything from identifying, approaching, and screening potential candidates, to overseeing and conducting the interview process. We were presented with several top-tier candidates and ultimately hired a new MD who has been an excellent addition to the business. We are extremely excited about the future of Durkin and Sons as an EOT and would like to express our sincere thanks to the Entrepreneurs Hub team for their invaluable support. We’ve already recommended them to other business owners exploring their options.”
Michael Durkin
Durkin & Sons
FAQs – EOT
What does Employee Ownership Trust (EOT) mean in the UK
An Employee Ownership Trust (EOT) is a structure that allows a business owner to sell a controlling share of their company to a trust that holds the business on behalf of its employees. The trust becomes the majority shareholder, and employees benefit collectively from the company’s success.
In the UK, EOTs were introduced by the government to encourage employee ownership and long-term business stability. Owners can sell their shares to the trust and may receive certain tax advantages, while employees share in profits through bonuses and greater involvement in the company’s future.
How does an Employee Ownership Trust work when selling a business?
An Employee Ownership Trust works by purchasing a controlling share of a company on behalf of its employees. The trust becomes the majority shareholder and pays the previous owners over time, typically using the company’s future profits. This allows ownership to transfer to employees while maintaining business continuity.
Is my business suitable for an Employee Ownership Trust?
A business is typically suitable for an Employee Ownership Trust if it has stable profits, strong management and sufficient cash flow to fund the purchase over time. Companies with a committed workforce and long-term growth prospects are often good candidates for employee ownership.
What are the advantages of an Employee Ownership Trust for staff?
An Employee Ownership Trust allows employees to benefit directly from the success of the business through profit-sharing and increased job security. Employees do not usually need to buy shares themselves, as the trust holds ownership on their behalf.
In the UK, staff in EOT-owned companies may receive tax-free bonuses of up to £3,600 per year. Employee ownership can also improve engagement, retention and long-term commitment to the business.
What are the downsides of selling to an Employee Ownership Trust?
One downside of selling to an Employee Ownership Trust is that the purchase price is often paid over time rather than as a lump sum. Payments to the seller are usually funded from the company’s future profits.
EOT transactions can also require careful structuring and ongoing governance. Because the business must generate sufficient cash flow to fund the purchase, this type of sale may not be suitable for every company or owner seeking an immediate full exit.
Can a founder still be involved in the business after selling to an EOT?
Yes, founders often remain involved in the business after an EOT sale, particularly during a transition period. Many owners continue as directors or advisers while leadership responsibilities gradually transfer to the management team.
What is the best way to sell a business in the UK?
The best way to sell a business in the UK is through a structured process that prepares the company properly, identifies the right buyers and creates competitive interest. Preparation, valuation and buyer targeting are critical to achieving the best outcome.
Successful sales typically involve preparing financial information, identifying strategic buyers, approaching them confidentially and managing negotiations. Working with an experienced adviser helps maintain momentum, protect confidentiality and maximise the value achieved.
How much can I sell my business for?
Most businesses are sold based on a multiple of profit, usually EBITDA or adjusted net profit. The exact valuation depends on factors such as growth potential, recurring revenue, customer diversification and management strength.
Strategic trade buyers may pay higher multiples when your business provides clear synergies, new capabilities or market expansion opportunities. Understanding these value drivers helps position the business effectively during the sale process.
The basic equation is actually quite simple. Read more…