Why business ownership matters: Exploring co-ops, mutuals and employee ownership trusts
Written by David Alcock (pictured), partner at Anthony Collins
In their manifesto, the Labour Government committed to doubling the size of the co-op movement.
Since their election in July last year, the Government has been exploring how this might be done. This has led to the creation of the Co-operatives and Mutuals Council, alongside meetings with a range of experts including our own David Alcock, head of social business at Anthony Collins.
David leads on our work on employee ownership and other alternative business structures.
Why has the Government made this commitment? Why does ownership matter? And how might the Government give businesses an incentive to think about ownership differently?
Ownership matters because it affects who benefits from a business.
Research shows that ownership structures influence productivity, resilience, staff retention and recruitment. So, the ownership of a business really matters.
We make assumptions about how businesses should be done based on a 19th century model.
The Victorians invented the limited liability company, where investors own the business and it is run in their interests, and it quickly became the UK’s dominant business model.
But it is only one route to ownership, and it might not be best for every business.
Over the last 11 years, one form of mutual ownership – the Employee Ownership Trust (EOT) - has grown rapidly.
In 2014, there were a few hundred employee-owned businesses – today, there are over 2500 and the rate of increase shows no signs of slowing down.
EOT-owned businesses form an increasingly significant part of the alternative ownership ‘landscape’. One key reason for this is the exemption from Capital Gains Tax for share transfers to an EOT, which gives owners a practical incentive to choose this route.
But what might this mean for your business? And how can you find out more?
We will be exploring these topics in an evening celebrating different variations of business ownership at our offices on Thursday 23 October, working with the West Midlands Ownership Hub, the Greater Birmingham Chamber of Commerce, and Telos.
Come and hear from policy experts and business owners and meet colleagues on the ownership journey. Join us to find out what’s best for your business, so that you can make an informed decision. Register for free here.