When shareholders at Aviation Ground Support made the decision to retire from their business, there was one thing above all else they wanted to try and ensure. Having spent close to 20 years building up the company, they were determined that whoever took over the running of it would carry on growing the company and provide ongoing job security for its employees.
Following careful consideration the shareholders decided an Employee Ownership Trust (EOT) was the best way for them to leave the business, which provides support services at a number of UK airports.
This method of exiting is becoming increasingly popular and experts predict many more businesses will be structured via EOTs over coming years. It is attractive to many because it combines a capital gains tax exemption, with the requirement for the company to remain under the control of an EOT whose purpose is to run a successful business for the long-term benefit of what is often its most valuable asset – it’s staff.
Having chosen their solution to overcome a hurdle in a key part of their business’ life cycle, the shareholders at Aviation Ground Support also had a problem. How could they find the specialist legal support required to help them navigate what is a relatively new and complex area for entrepreneurs? Enter Harper James – a law firm which specialises in helping ambitious businesses grow from start-up to scale-up.
“We’d identified three or four different legal service providers, who said they were able to help us,” said Martin Quinn, who is a qualified accountant and led the process on behalf of the shareholders. “But Harper James stood out for two reasons. One, their team had a personable approach. It felt like we were talking to real people who were on our side and who wanted to help us get what was a really important job done. And they also clearly set out a timetable with fixed costs that we were able to understand, work within and which we were happy with.”
Up until that point Aviation Ground Support Ltd were not a client of Harper James Solicitors, who offer unique subscription plans to enable businesses to access affordable legal services.
After onboarding the aviation firm, our experts Stephen Evans and Ian Fraser started to advise Aviation Ground Support’s shareholders, and in the space of just a few weeks we were able to help them exit their business via the EOT model.
“We had a template of how we wanted to do things,” Martin added. “But Harper James helped ensure this template was moulded and designed in the way that was best for our business whilst meeting the requirements of the EOT regulations. They always had lots of questions which helped ensure every box was being ticked.”
The EOT transfer was finalised earlier this month, meaning Harper James was able to ensure the deal was concluded ahead of the April tax deadline – which was a hugely important factor for our client.
Martin says the firm’s employees are now looking forward to the future. “Initially, when we announced our intentions, there was a little bit of fear of the unknown among the employees,” Martin reflects.
“But we took time to speak to all of our staff and, after explaining that we would provide continuity of managerial support to the businesses and that their employment status remained unchanged, they are now excited at the future stake they will have in the company.”
The independently run trust is looking to establish a form of employee representation and will now oversee the governance of the business. Commenting on the support we provided Stephen Evans, a corporate solicitor at Harper James, said: “Making the decision to exit a business is, by definition, a hugely significant moment for anyone who has spent years building up a company.
“We were therefore privileged to be able to support Aviation Ground Support Ltd to exit in a way that they and their staff were happy. It will give the business a great platform to move forward from.”
Ian Fraser, an employee incentives solicitor, added: “This is the first EOT transaction Harper James has been involved in.
“But many more businesses are likely to utilise this method when they come to exit. Our team of experts are perfesctly placed to provide the advice they need to help them do it.”