Guide

How to achieve an employee buyout

Running the business after an employee buyout

Once the buyout has been completed, the business normally continues to be run as a profit-making enterprise. In many cases, the same managers continue to run the business, and the same employees to work in the business - even though the employees are now the owners. But both employees and managers need to understand their new roles.

Employees are likely to need training in their new role as owners. For example, they may be responsible for voting to elect directors to the board of the company. In a relatively small buyout, employees may be taking on new supervisory or management roles and need to learn new skills. See skills and training for directors and owners.

Managers and directors also need training and support. They need to understand the crucial importance of good communication within the business to avoid conflict. They also need to maintain a culture of employee participation, which should have been developed when planning for an employee buyout.

Managing ownership

If shares are owned by an employee trust, the trust must have trustees - some of whom are likely to be employees. The trust may run an internal market in shares, allowing employees to buy or sell shares in the business. Or the trust might distribute dividends to employees.

The trustees will need specialist advice. Read more on help and advice for employee buyouts.