Postlethwaite Welcomes Announcement Of Co-operatives Bill

Postlethwaite, the law firm specialising in employee ownership, welcomes David Cameron’s announcement that the legal basis of co-operatives in the UK is to be updated and simplified in a new Co-operatives Bill.
By: POSTLETHWAITE Law Firm
 
Jan. 27, 2012 - PRLog -- NEWS RELEASE

POSTLETHWAITE WELCOMES ANNOUNCEMENT OF CO-OPERATIVES BILL

Postlethwaite, the law firm specialising in employee ownership, welcomes David Cameron’s announcement that the legal basis of co-operatives in the UK is to be updated and simplified in a new Co-operatives Bill.

The existing legislation on co-operatives has changed little since 1965, whereas conventional limited companies have benefitted from two major reforms, most recently in 2006.

However, If the Government are serious about creating significant growth in employee share ownership, other measures will be needed.  The single biggest positive step would be to create a new form of employee trust, which could acquire shares from existing company owners (in particular, founders wishing to retire), funded from Company profits and deductible against corporation tax.

Those shares could then be retained by the trust long term (similar to John Lewis) or wholly/partly passed on to employees.

Although this used to be possible, abuses of employee trusts for tax planning reasons meant that this route to employee ownership ceased to be available from 2002.  Our view is that a new form of employee trust is needed which may only either retain shares permanently or pass them to all employees in a company on an equal basis, and which could not be used for tax planning that benefitted only small numbers of people.

Arrangements for employee share ownership involving more select numbers of employees (for example, share option schemes, EMI share options, CSOPs, growth shares and joint ownership plans) will continue to be important and would benefit from some updating and reform, although overall in our view they currently work quite well.

http://www.postlethwaiteco.com

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Notes for Editors:
POSTLETHWAITE is a law firm which provides specialist advice on employee share schemes, employee share ownership and majority  employee ownership, including EMI share options, approved options, long term incentive plans, Share Incentive Plans (SIPs), ownership by employee trusts and a wide variety of other share schemes.  We look after clients from all parts of the UK, with a particular focus on smaller listed and private companies.  

For further information concerning employee ownership and employee share incentives, please contact Robert Postlethwaite on 020 7470 8805  11-15 Betterton Street London WC2H 9BP rmp@postlethwaiteco.com
End
Source:POSTLETHWAITE Law Firm
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Tags:CO-OPERATIVES BILL, Employee Share Schemes, Share Scems, Employee Ownership Lawyers
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