Setting up an Employee Ownership Trust typically costs $50,000 to $80,000 one time, covering legal drafting of the trust and related documents plus deal structuring. Ongoing maintenance runs about $10,000 to $20,000 a year, paid to the trustee. These are planning ranges, not quotes, and vary with the company and the deal.
An Employee Ownership Trust (EOT) is generally one of the lower-cost ways to move a company into employee ownership, especially compared with an ESOP. Typical costs:
- Setup: roughly $50,000 to $80,000, one time. This covers drafting the trust and the related governance and transaction documents, and structuring the sale of the business into the trust.
- Ongoing: roughly $10,000 to $20,000 a year, paid to the trustee for administering the trust and meeting its fiduciary obligations.
What drives the cost:
- The complexity of the company and the deal: size, entity type, existing agreements, and whether the sale is seller-financed or uses outside capital.
- The trustee arrangement and the scope of their ongoing role.
- The state where the trust is formed and any specialized legal work that requires.
Because the annual trustee cost is effectively a floor, a company generally needs enough net income to cover it comfortably before an EOT makes sense. Exact figures vary by company; treat these as planning ranges, not quotes.
These figures reflect US practice; UK Employee Ownership Trusts operate under a different tax and legal regime, so costs there differ. This is general information, not legal or tax advice; consult a qualified professional for your situation.