If you’re thinking about whether you can sell your business to an Employee Ownership Trust (EOT), our quick, four question checker will help you determine if your company meets the criteria for sale to an EOT and qualifies for the associated tax benefits.
You don’t need to prepare. You just need basic information about your company structure, employee numbers, and shareholding details.
Trading status
Only ‘trading’ companies can qualify for EOT tax benefits. This means your company must primarily sell products or services. Not sure which one your business is? Read our help page.
Is your company a trading company or an investment company?
Controlling stake
For a valid EOT transition with the associated tax benefits, you must sell a controlling stake (minimum 51%) of your business. This means even if you remain a shareholder, you'll become a minority stakeholder subject to EOT governance. Learn more on our help page.
Will your EOT gain and retain a controlling stake (51%+)?
Profit sharing
In an EOT, all eligible employees must benefit equitably from the profit share. This doesn’t necessarily mean every employee receives the same amount of profit share – but the system must not favour individuals. You can learn more about how profit share can be split on our help page.
Will the staff profit share be equitable?
Participator ratio
To qualify for an EOT sale and associated tax perks, your business must comply with the participator ratio. Roughly speaking, you need at least five employees for every two shareholders. The correct participator ratio must be in place for at least 12 months before the date of the sale to the EOT. Add your information below and we’ll work out your ratio. You can find out more about this on our help page.
How many employees and shareholders do you have?
Something's not right. Please review the errors and try again.
Good news, your business qualifies
Sorry, your business doesn't qualify
Trading status
You meet this requirement – trading companies qualify for a sale to an EOT and the associated tax benefits.
Unfortunately, investment companies don’t qualify for a sale to an EOT. If you’re not sure whether your company is considered trading or investment-based, get in touch and we can help clarify.
Controlling stake
Your plan to transfer 51%+ ownership to the EOT meets the controlling stake requirement.
The EOT needs to gain a controlling stake in your business – at least 51%. Based on your answer, you wouldn’t qualify for the sale and associated tax benefits.
Profit sharing
You’re planning a fair and equitable profit share. That’s one of the key criteria for an EOT sale.
To sell your business to an EOT, you must create an equitable profit share payments plan for staff, meaning you cannot single out individuals positively or negatively.
Participator ratio
Your participator ratio is . Your ratio needs to be 40% or under for your business to qualify.
Your business meets the ratio of employees to shareholders needed for an EOT sale.
Your situation appears to have some complexities. You need to consult with a professional who can take a more in-depth look at your business set up. This consultation is included in our transition packages. You can read more about this rule on our eligibility checker support page.
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