Did you know: Company succession: employee buy-out as an option
According to the report, there are too few interested parties who want to take over a business. Due to the succession gap, 231,000 companies are considering closing down by the end of this year. An employee buy-out (EBO) could be a possible succession solution for many SMEs.
Employees take over the company and management
An employee buyout describes the acquisition of a company or part of a company by its workforce. The acquisition does not take place directly, but rather through a cooperative that the employees form in advance of the company acquisition.
The cooperative then takes over the company's shares from the entrepreneur (‘cooperative model’). The cooperative model is particularly well suited to company succession by the workforce because it focuses on solidarity and equal participation and is more democratically organised than a corporation. The primary purpose of a cooperative is not to participate in capital and returns, but to promote the interests of its members.
Note: In the event of an EBO, the purpose of the cooperative is to ensure the continuation of the company and the gainful employment of its members, as well as to promote their personal and professional development. This benefits both the employees and the company equally.
Moderate share price enables everyone to participate
The share price of a cooperative represents the maximum amount in euros that a member may contribute. At EBO, this is usually between 100 and 1,000 euros. This ensures that every employee has the opportunity to participate in the cooperative.
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Source: www.gmbh-beratungsbrief.de GmbH-Geschäftsführer Persönlich (Issue 4 – 28. February 2025)
