BIS publishes draft model documentation for an employee-owned company
The Nuttall review recommended the development of a set of model documents for employee-owned companies. The Department for Business, Innovation and Skills (BIS) has recently published for comment a draft pack of model documentation for an employee-owned company. These documents were developed by Pett, Franklin & Co LLP, and include:
- A guide to the constitution of an employee-owned company;
- Model Articles of association of an employee-owned company;
- A model trust deed of an employees’ share trust, with notes on the model trust deed; and,
- Model Articles of Association of a trustee company (a guarantee company).
The guide sets out how individual employees may benefit, and a summary chart of proposed ownership and governance structure.
The guide also proposes an Employees’ Council which would have both a formal legal role in the selection of employee directors and of employee trustee directors of the trust and a role in setting standards by which the company operates.
The guide envisages that the employees’ council will meet at least twice in every calendar year; and that any resolution of the employees’ council calling upon the directors to take any action (or refrain from any action) in relation to the management of the business of the company, shall be advisory only and the directors would not be bound to act in accordance with any such resolution (or at all) if, in their opinion, to do so would not be in the best interests of the company or its shareholders.
Link to BIS draft documents – http://goo.gl/mY3pE
Partner and Head of Employment Law, DKLM LLP