EOTs
The current owner of the business is the seller. That individual shareholder (or group) has the sole authority to choose who will buy the company.
For employees to benefit from ownership, an Employee Ownership Trust must be established to hold the company’s shares on their behalf. The Trust becomes the legal shareholder and manages the responsibilities of ownership, while employees benefit from the company’s success through the Trust without needing to purchase or directly own shares themselves.
The corporation’s shares are what’s being sold, with the business’s future cash flow used to service the acquisition debt and effectively fund the owner’s exit, while continuing to generate profits and grow over the long term.
The employees are the ultimate beneficiaries of the corporation's profit and value. The structure of the Trust determines how and when employees benefit — through profit distributions (e.g., dividends), growth in company value, or a combination of the two.
Because employees do not contribute their own capital to purchase the company, EOT transactions are 100% debt-financed. Funding can come from bank loans, seller financing, or other sources, often in combination. The right financing structure depends on the business and the terms agreed upon with the seller and other capital providers.
We are the experts in Canada’s EOT legislation — because we helped build it. We bring that insider knowledge to every transaction.
EOTs may be new, but selling a business isn’t. Our team brings years of real transaction experience, guiding owners through every stage of a sale.
A signed deal is only the beginning. We guide your team through the transition to a true ownership culture.
