Quintessa among first to switch to new employee-ownership trust business model
Quintessa has adopted the employee-ownership trust ("EOT") business model.
Quintessa has adopted the employee-ownership trust ("EOT") business model. Quintessa Limited is now 100 per cent owned by an EOT. Quintessa Employee Trustee Limited agreed to acquire all the issued share capital of Quintessa on 8 July 2014. The sale took effect when the Finance Act 2014 received Royal Assent on 17 July 2014.
Henley-on-Thames and Warrington based scientific and mathematical consultancy Quintessa is one of the first businesses in the UK to switch to EOT control following the introduction of the new tax regime for EOTs.
Quintessa was advised by Fieldfisher. The team comprised partners Graeme Nuttall OBE, Head of Fieldfisher's Mutual and Employee Ownership team, and Neil Palmer; Senior Associate, Jennifer Martin and Associate Melanie Bates.
The Founder and former major shareholder, David Hodgkinson said:
"The EOT business model is good for our business and good for many other businesses. As members of the Employee Ownership Association we are long-time supporters of employee ownership. We have worked towards adopting the trust model of employee ownership for several years and the new favourable tax regime for EOTs provided the final encouragement for the shareholders to sell to an EOT. We are delighted to have secured the future of the business in this way. Independence and longevity is key to delivering the service our clients want and the EOT business model is a perfect fit for our business.
"Fieldfisher's professionalism and enthusiasm were vital ingredients in guiding us through this once in a business lifetime event".
Fisherfisher partner, Graeme Nuttall OBE said:
"One of the key recommendations of the Nuttall Review was to promote the trust model of employee ownership. The Coalition Government has whole heartedly supported this recommendation particularly with the new tax exemptions for employee ownership trusts. Individuals selling a controlling interest to an EOT pay no capital gains tax. Employees in an EOT controlled business can receive income tax free bonuses up to £3,600 per tax year. This is why a sale to an employee trust provides a perfect succession solution. The shareholders in Quintessa saw immediately that control by an EOT was right for securing the long term future of their business in the best interests of its employees and clients."
Danny Alexander, Chief Secretary to HM Treasury said:
"This is incredibly welcome news. The Employee Ownership model not only gives workers a stake – and a voice – in the companies that employ them. It also allows them to benefit from their success.
"The Government has worked hard over the last four years to create a legal and tax environment that encourages more companies to set up in this way. I’m delighted that Quintessa are doing so."