Employee Ownership Trust – Packing Checklist

Employee Ownership Trust – Packing Checklist

Most of us, at some point in our lives, have been through some version of the following the night before a holiday. The flight and hotel are booked, the bags are packed, passports safely stowed away, and yet there is still that gnawing worry that you’re forgetting something. Strangely selling a company to an Employee Ownership Trust is very similar! Below are a few things you can add to your, “Packing Checklist” when approaching sale day:

Regulatory Clearance: This won’t be relevant for all companies but those regulated by professional bodies need to ensure they’ve made the appropriate notifications. Chartered Accountancy firms, for example, cannot normally be owned by a trust. When The Peloton went through its own EOT transition we had to go through a detailed review process to get sign off from the ICAEW.

Bank: Are you planning to use the same company bank account or a new one? If the ultimate beneficial owner is changing, you may find you need to notify them to ensure the account is not closed.

Insurers: As with the bank, whether company ownership is changing there is normally an obligation to notify your insurance providers.

Document Review: It’s rare that the sale terms, trust deed, shareholders agreement, etc. remain the same from first draft through to completion. Before selling it’s worth a final review of all the documents to make sure all the changes are accurately reflected. So, get some strong coffee brewed and a set of reading glasses out!

Ancillary Documents: You may find, reading through the sales documentation, that they reference various other things. For example, “pay cannot be increased save in line with the firm’s remuneration policy.” Or, “the employee forum shall be conducted in line with its written constitution.” Do you have a documented remuneration policy? Is it up to date? What about the employee forum, have you actually written a constitution? If not time to get cracking.

Director/Trustee Meetings: The sale documents likely reference that a certain number of director and trustee meetings need to take place each year. If your company has, historically, been run by a single person this will be a change. To avoid getting caught out it’s worth booking those meetings in now.

Step Back, Big Picture: Particularly as things near sale date it’s easy to get lost in the detail. However, it’s important not to lose sight of the big picture. The sale day is just day 1 of the company’s journey as an employee-owned business. How are you going to really embed the culture, how are you going to get the team engaged and involved, how is the employee forum going to work?

However carefully you pack, inevitably someone will forget a toothbrush, a book, sunscreen, etc. As long as you have the important things sorted though, it’s rarely a drama. That said, hopefully, the above has given you a bit of a steer on some final checks you can carry out to ensure you’re as prepared as possible when embarking on your employee ownership adventure!

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