Share buy-back rule changes to boost employee ownership, announces minister
30 April 2013
Employment relations and consumer affairs minister Jo Swinson has announced changes to share buy-back rules aimed at boosting direct employee ownership and cutting red tape.
Tue, 30 April 2013
Employment relations and consumer affairs minister Jo Swinson has announced changes to share buy-back rules aimed at boosting direct employee ownership and cutting red tape.
Under the new rules, companies with employee ownership that issue shares directly to their employees will find it easier to buy back these shares when an employee leaves. The company will then be able re-issue these shares more easily when new employees join.
The government believes that the changes will allow companies to avoid the situation where companies become predominately owned by former employees or others outside the company. “I hope these changes, alongside the announcement of an Employee Ownership Day on 4 July, will raise awareness of the benefits of employee-owned companies and lead to an increase in the number of direct employee-owned firms across the UK,” says Swinson.
The government believes that employee-owned companies are more profitable and create more jobs than those owned solely by directors or by outside shareholders.
In October, Chancellor George Osborne announced plans for a new kind of employee contract, an owner-employee under which individuals would exchange some of their UK employment rights for ownership in the form of tax-exempt shares in a business.
Employment relations and consumer affairs minister Jo Swinson has announced changes to share buy-back rules aimed at boosting direct employee ownership and cutting red tape.
Under the new rules, companies with employee ownership that issue shares directly to their employees will find it easier to buy back these shares when an employee leaves. The company will then be able re-issue these shares more easily when new employees join.
The government believes that the changes will allow companies to avoid the situation where companies become predominately owned by former employees or others outside the company. “I hope these changes, alongside the announcement of an Employee Ownership Day on 4 July, will raise awareness of the benefits of employee-owned companies and lead to an increase in the number of direct employee-owned firms across the UK,” says Swinson.
The government believes that employee-owned companies are more profitable and create more jobs than those owned solely by directors or by outside shareholders.
In October, Chancellor George Osborne announced plans for a new kind of employee contract, an owner-employee under which individuals would exchange some of their UK employment rights for ownership in the form of tax-exempt shares in a business.
