JMW Solicitors Advises I-COM on Becoming Employee-Owned

Employee ownership is becoming an increasingly popular option for businesses, especially in people-led, cash-generative businesses in the creative and tech sectors. It can help companies unlock the potential of their staff and encourage engagement by allowing employees to have an indirect stake in the business and, ultimately, improve staff retention in competitive marketplaces. Advised by Partner and Head of Corporate, Mike Blood, and Associate Solicitor, Emma Hickman, I-COM has become one of the latest businesses to embrace the employee trust model of ownership.

Looking to provide their employees with greater security and opportunity, the award-winning digital marketing agency decided to establish an Employee Ownership Trust (EOT) into which it transferred majority ownership of the business. 

The main shareholders Managing Director Mike Blackburn and Technical Director Ravi Bhalla wanted to use this vehicle because it is a tax-efficient method of divesting some ownership whilst giving back to the team that helped the business succeed. I-COM appointed JMW to provide advice on the transaction structure and handle the establishment of the EOT after hearing of their involvement in a similar deal for recruitment and payroll services firm, Kinetic.

How JMW Helped

JMW’s Mike Blood and Emma Hickman provided wide-ranging advice to I-COM, including:

  • Establishing and registering the EOT, and putting in place a constitution to guide the operation of the trust
  • Revising I-COM’s articles of association and shareholder agreements to enable the business to work effectively under the new structure with a governance structure that would satisfy the requirements of the EOT scheme.
  • Liaising with I-COM’s accountants to ensure the terms of the sale satisfied the requirements of HMRC 
  • Drafting the share purchase agreement which effected the transfer of the shares to the Employee Ownership Trust
  • Advising on the appointment of new directors including three trust representatives to help with decision-making and reducing the potential for a conflict of interest 

I-COM’s Mike Blackburn said: “The talents of our people are what makes us successful as a business. In today’s employment market where skilled people are in short supply, giving the team a stake in the company seemed like the next logical step to take. 

“Creating the EOT was the best way of making sure that our ethos and values stay intact, while encouraging engagement and focusing the team on delivering even greater results for our clients.

“JMW’s Mike and Emma worked closely with us to ensure the deal went smoothly by handling legal aspects of setting up the trust quickly and efficiently. They held regular meetings with us to provide updates and discuss our options to help shape the deal, as well as ensure we fully understood the complexities involved with this type of employee ownership.”

Talk to Us

If you’re considering making your business employee-owned through a trust scheme, our solicitors can provide advice on the benefits and how to get started. Contact JMW today on 0345 872 6666, or fill in our online enquiry form and we'll call you back.

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