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Employee ownership is where all employees have a ‘significant and meaningful’ stake in a business.
This means employees must have both:
It’s easier for companies limited by shares to set up employee ownership.
Employees hold shares in the business through share schemes like Share Incentive Plans (SIPs). They may pay less tax if it’s an approved scheme.
Other types of business (eg charities or sole traders) may have to change their legal structure so they can sell shares. Employee-owned firms may operate as co-operatives.
Employees must have a say in how the business is run.
Different ways of engaging employees are suitable for different businesses, but can include:
Read the guidance and model documentation for more information about types of ownership and engagement.
There’s a separate guide for employees who want to request a move to employee ownership.
You can also read guidance on the tax issues around Employee Share Trusts and when employees sell their shares.
Don’t include personal or financial information like your National Insurance number or credit card details.
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