Kingswinford based manufacturer has transitioned to employee ownership.
Legal Clarity recently advised Kingswinford based manufacturer on its transition to employee ownership.
Plastic Coatings Ltd, now celebrating 70 years in business, is a leading expert in providing specialist coating services in the automotive, aerospace and energy industries.
Plastic Coatings Ltd is a trusted supplier by leading clients including, Rolls-Royce, Airbus, BAE System and GKN Aerospace and their work is vital to the protection of the energy sector.
The transition to employee ownership for the business was a decision that would ensure retention of the company’s unique culture and embedded values.
Plastic Coatings Ltd said: “There won’t be any change to our day-to-day operations. The Management Team at Plastic Coatings Ltd remain in position and along with the wider team at our Kingswinford site we continue to be fully committed to providing our customers with a wide range of high-quality coatings and related services with excellent turnaround times”.
“The change of ownership at Plastic Coatings Ltd falls as we celebrate our 70th year and really secures PCL’s future as an independent, forward-looking organisation. It marks the start of an exciting future for our highly skilled and committed team.”
Employee ownership is a welcome change for the company who now joins more than 1000 businesses in the UK who have made the same transition.
Gary Davie and Jane Jevon from Legal Clarity advised on the legal aspects of the EOT ensuring that the transaction was as smooth and straight forward as possible.
Gary Davie said: "More and more business owners are coming around to the view that employee ownership is an ideal model to preserve the company culture and help it grow."
"We supported a number of EOT transitions in 2022 and 2023 is showing further growth in demand for this succession option. With close client relationships already in place and a structure that rewards talent across the organisation, it can make very sound sense to leave the company to those people who made it a success."
Jane Jevon said: “This transition was clear for Plastic Coatings Limited since they have a strong management team to whom the shareholders were happy to entrust the company and employees going forward, and a sale to an EOT was therefore the best option to achieve that.”
Legal Clarity Limited is a forward-thinking leading firm with over a decade of experience in EOTs.
Legal Clarity Partner Gary Davie, recently recognised in The Legal 500 UK 2023 for his outstanding work in employee ownership, has specialised in corporate finance for over 30 years and has worked with numerous entrepreneurs and owner managed businesses.
Experienced Tax Lawyer Jane Jevon also from Legal Clarity, together with Gary Davie are leading experts on EOTs within the West Midlands and throughout the UK.
For further information on Employee Ownership Trusts, please visit our Legal Clarity Limited website or call us on 0121 314 9102 for help with a smooth transition.
It will not only preserve the success of your business but inspire and motivate the retention of committed and hard-working employees.
What is employee ownership?
Employee Ownership is an alternative exit route for selling shareholders.
Instead of selling the company to a third party, shareholders can sell their shares to their employees, making the employees the new owners of the business.
Why sell a company to employees?
The employee ownership model offers compelling tax advantages for your selling shareholders.
Shareholders that sell their shares to their employees do so entirely free from capital gains tax and inheritance tax.
Its also gives the Company a clear framework for succession and is a great way to attract and incentivise employees.
By giving the people who work for it a controlling stake in the company, it reinvigorates the business by making the people part of its growth ambitions.
How does an EOT work?
A Trust is set up to meet all legal requirements and qualification conditions.
The Trust is owned beneficially by the employees.
Exiting shareholders sell their shares (51%-100%) to the Trust.
The employees own the majority of the Company (via the Trust).
The purchase price to the selling shareholders is paid in a series of payments raised from company profits.
These instalments are often spread over a number of years (as profits become available) and are exempt from capital gains tax.
Want to know more about EOTs?
With our depth of experience and expertise in EOTs, please feel free to get in touch or alternatively, drop an email to eot@legalclarity.co.uk to arrange an initial conversation.
More EOT insights
Do employees need to agree to the company being sold to an EOT?
Can the selling shareholders retain a stake?
Will an Employee Ownership Trust work for any business?
Are employee-owned businesses as competitive as conventionally owned businesses?
Does employee ownership only come about when a business owner(s) is looking to sell up?
