TEn Insurance completes switch to new employee-ownership trust business model
Fieldfisher has advised TEn Insurance on its adoption of the employee-ownership trust business model.
TEn Insurance has adopted the employee-ownership trust ("EOT") business model. The holding company of the TEn Insurance Group, Ten Operation, Services and Holdings Limited ("TOSH"), is now almost 70 per cent owned by an EOT, called The Enterprise Network Trust. TEn Insurance announced on 7 July 2014 that it would become majority owned by its employees. On 4 September 2014, The Enterprise Network Trustee Limited agreed to acquire 65,000 of the 93,500 issued shares in TOSH. The agreement took effect on 7 November 2014, the day after the opening of a new, larger Manchester office of TEn Insurance.
Buckinghamshire and Manchester based independent broker network TEn Insurance is another UK business that has made the switch to EOT control following the introduction of the new tax regime for EOTs in the Finance Act 2014.
TEn Insurance 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 Trainee Solicitor Fiona Morris.
Malcolm Lee, managing director, founder and former major shareholder said:
"TEn Insurance was founded in 2004 and ten years later, I am delighted the business has made the transition to employee-trust ownership. We started marketing our unique business model in February 2005 and as an independent broker network, it was vital that TEn Insurance secured an independent future. By adopting the trust ownership model, the long-term future of the business has been secured for its broker members in a way which allows all employees to share in the success of the organisation.
"The team at Fieldfisher were excellent with their professional expertise making the transition straightforward and also gave friendly, helpful advice making the whole process simple for me and my Board to understand the various steps to complete the transfer."
Fieldfisher partner, Graeme Nuttall OBE said:
"The Nuttall Review recommended that more be done to promote the trust model of employee ownership. The Coalition Government has done this 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. The shareholders in Ten Insurance have also now played their part in promoting employee ownership. They have secured the long term future of their business by switching to this ownership model. This will encourage others to consider employee ownership as a succession solution: a solution that.is good for a business and for its staff."
Business Minister Jo Swinson said:
“Employee ownership is good for business, employees and the economy. That’s why I support the Nuttall Review's proposals to make this approach a mainstream part of our economy. It is encouraging to see more businesses like TEn Insurance converting to give employees a significant and meaningful stake in their company. It is particularly pleasing that a business in the financial sector is planning for the long-term by using an employee-ownership trust to secure its independent future.”
Graeme Nuttall and a team from Fieldfisher will be attending The EOA's Annual Conference and Gala Dinner 2014, which is being held this evening and all day Tuesday 18th November at the East Midlands Conference Centre in Nottingham.