Latest news with #EOT
Irish Independent
5 days ago
- Business
- Irish Independent
Government urged to end to tax barriers of moving companies into employee ownership
IPSA has long argued the current tax structures represent an obstacle for business owners seeking to move their company to employee ownership through Employee Ownership Trusts (EOT). The group has called for Ireland to replicate the EOT model in the UK, where there has been significant uptake through a generous relief on Capital Gains Tax (CGT). The group recently met with officials at the Department of Finance and is calling for targeted reforms to reduce the 'tax obstacles' for EOTs in Budget 2026. It hopes reforms will incentivise succession planning through broader use of the trusts and, ultimately, protect jobs at companies that could otherwise be dismantled after a sale. Marie Flynn, chairperson of IPSA, said gaining political engagement on EOTs was a priority for the organisation. 'It is crucial for convincing the Government to follow the advice of the 2024 Indecon Review to reform the taxation of EOTs in Ireland so that business owners and employees can benefit from an economic model that has proven popular and successful in the UK, US, Australia and Canada.' Flynn said that when owners look to exit their business, sale options typically include trade buyers, private equity firms or the next generation in the family. A third-party sale usually attracts CGT of 33pc. However, with EOTs, there are question marks over whether selling shares to such a trust would just attract CGT. Due to what Flynn called 'unhelpful anti-avoidance legislation', the tax bill when someone sells to an EOT in Ireland could hit as high as 55pc. Flynn added that EOTs are considered 'discretionary trusts' and attract a tax that kicks in when the person who sold their shares to it dies. This means a 6pc tax charge is placed on the trust, with a 1pc levy applied yearly. IPSA wants the Government to remove these tax obstacles through a mix of Revenue guidance and an exemption from the discretionary trust tax regime for EOTs. IPSA calculates that this would result in no revenue loss from 'levelling the playing field.' IPSA's plan also includes the Government implementing a recommendation in the 2024 Indecon review to reform the taxation of Irish EOTs in line with their treatment in the UK. Business owners in the UK have relief from CGT on selling a controlling, or 100pc, stake to an EOT. ADVERTISEMENT Flynn said there was massive potential for EOTs in Ireland. She believed several hundred companies could become employee-owned over the next number of years should the Government support it. An EOT is a trust that enables a company to become owned by its employees. It can be set up by a company's existing owners as part of their exit or succession planning strategy. Founders starting a new business can also set one up if they wish to be employee-owned. IPSA argues that EOTs would benefit Ireland as their wider use would help secure workers' jobs and ensure a company remains in its community. It argues that sales to a competitor can often result in businesses being dismantled or relocated, with an accompanying loss of jobs.
Indian Express
24-05-2025
- Business
- Indian Express
Karnataka High Court rejects L&T's Rs 28.74-crore claim against BMRCL in Metro delay dispute
The Karnataka High Court, in a ruling on May 20, dismissed an appeal by Larsen and Toubro Limited (L&T) against the Bengaluru Metro Rail Corporation Limited (BMRCL), upholding a lower court's decision to nullify an arbitral award of Rs 28.74 crore for losses incurred due to project delays. The judgment was delivered by Justices V Kameswar Rao and S Rachaiah. 'The Tribunal's award of Rs 28.74 crore, ignoring Clauses 2.2 and 8.3, is a jurisdictional error. An arbitrator, bound by the contract, cannot override its express terms, especially when L&T accepted extensions without reserving compensation rights, rendering the award contrary to public policy,' they noted. The case traces back to a December 2009 contract, wherein L&T was tasked with building three elevated Metro stations—Yeshwanthpur, Soap Factory, and Mahalaxmi—for Bengaluru's Metro system. The 22-month project, governed by General Conditions of Contract (GCC), stipulated that delays caused by BMRCL would warrant only extensions of time (EOTs), not monetary compensation, as per Clauses 2.2 and 8.3. Delays emerged due to land acquisition disputes, resolved by May 2012, leading BMRCL to grant five EOTs without liquidated damages but explicitly prohibiting compensation claims. Seeking redress for alleged losses, L&T pursued arbitration. In 2018, the Arbitral Tribunal awarded L&T Rs 28.74 crore, referencing the Supreme Court's General Manager, Northern Railways v. Sarvesh Chopra (2002), which suggested contractors could claim compensation if they notified the employer during EOT acceptance. The Tribunal deemed L&T's communications sufficient to override the contract's no-compensation clauses. BMRCL challenged this under Section 34 of the Arbitration and Conciliation Act, 1996, before Bengaluru's Additional City Civil and Sessions Judge, who, in October 2022, overturned the award, citing its violation of the contract and the Tribunal's overreach. L&T appealed to the High Court, arguing that Clauses 2.2 and 8.3 were void under the Indian Contract Act, 1872, for being against public policy, and that the Sessions Judge improperly re-assessed evidence. Citing Sarvesh Chopra and precedents like ONGC v. Wig Brothers (2010), L&T claimed BMRCL's delays amounted to a fundamental breach. BMRCL countered that the Tribunal disregarded the contract and authoritative rulings, including Wig Brothers and Ramnath International (2007), which uphold no-compensation clauses. They argued L&T's EOT applications lacked explicit intent to claim compensation, failing Sarvesh Chopra's notice requirement. The High Court ruled in BMRCL's favour, finding that L&T's acceptance of EOTs without reserving compensation rights precluded later claims. The Court clarified that Sarvesh Chopra's relevant observations were non-binding, and L&T's communications—ambiguous in the first EOT and absent thereafter—did not meet notice standards. The tribunal's award was deemed a jurisdictional error, breaching public policy by ignoring contractual terms and judicial precedents. The court also criticised the tribunal's arbitrary 50:50 delay attribution and unsupported damage quantification. The court observed that 'an arbitrator, being a creature of the contract, cannot ignore its express terms, and awarding compensation in violation of such terms constitutes a jurisdictional error against public policy.'
Nikkei Asia
09-05-2025
- Business
- Nikkei Asia
Visual investigation: 1,000 US government webpages deleted
NEW YORK/TOKYO -- Huge swaths of U.S. government online information have vanished, with President Donald Trump's administration purging at least 1,000 pages from the websites of some 90 federal agencies, according to a Nikkei survey. Explore the full visual investigation here. Such pages include those related to climate changes and the attack on the U.S. Capitol on Jan. 6, 2021. Many of the deletions were based on executive orders Trump signed after his inauguration. As Trump passes 100 days back in office, officials in his administration are deleting images and data that do not align with Trump's worldview. In this visual investigation, Nikkei focused on examining over 10,000 entries from the End of Term Web Archive (EOT) project. We checked whether URLs that had been accessible in January could be accessed in March. Institutions such as Stanford University Libraries are involved in the EOT project. It is assumed that many of the registrants are anonymous librarians. For pages found to be inaccessible on the live sites, Nikkei reviewed their content using the Wayback Machine, a web archiving service, and categorized them according to keywords. Nikkei, based in Tokyo, also verified that access from Japan's IP addresses was not being blocked.
Vancouver Sun
28-04-2025
- Business
- Vancouver Sun
Opinion: Want a more resilient Canadian economy? Double down on democratic employee ownership
Article content With the U.S. government's escalating trade war, we need to rethink and prepare to reorient Canada's economy. We need new export markets and to reduce barriers to interprovincial trade, but we can do more. Article content Article content Our economy must be better for workers, small businesses, families and communities. We need creative and tested ideas that are supported across the political spectrum. Fortunately, such policies exist. Last year, federal legislation created Employee Ownership Trusts (EOTs), a promising new vehicle to make workplaces more democratic, giving workers more ownership and control. Article content Article content In a democratic employee-owned firm, employees collectively own a majority of the company, have meaningful rights to help shape decisions and profits are shared broadly and equitably. Article content Article content Such firms exist in Canada, but are small in number. They are most common in Quebec but exist elsewhere. Friesens, in Manitoba, is one of Canada's leading book printers and is employee-owned and democratic. Shift Delivery is a worker cooperative, bike-powered delivery firm serving Vancouver, and PCL Construction and Chandos construction are 100 per cent employee-owned. Article content EOTs make it easier for business owners to sell their firms to their employees, with the purchase price paid out of the firm's profits over several years, meaning no out-of-pocket costs to employees. Grantbook, a company that advises philanthropic foundations, became the first Canadian company to convert to an EOT in January 2025. Article content Article content Canada's federal and provincial leaders should adopt policies to help make our economy more resilient and there are many reasons why democratic employee-owned firms will help achieve that. Article content Democratic firms are more grounded in their communities as employee-owners are unlikely to move their businesses out of their communities in response to tariffs or other economic shocks. Nor are they going to run around the globe looking for the cheapest labour force. Article content Democratic employee-owned firms have a track record of weathering economic adversity and facing it with creativity. They are less likely to fail during a recession and more likely to maintain employment and wages for their workers, helping to maintain macroeconomic stability for the wider economy.
BBC News
24-04-2025
- Business
- BBC News
South west bakery chain turns its workers into owners
A bakery chain has become one of the largest employee-owned companies in the south Bakery has created an Employee Ownership Trust (EOT), giving its 400 plus staff a controlling interest in the in 1926 in North Somerset, the family-run business now operates more than 50 shops in 10 different counties across the south Insull-Griffith, Parsons retail director, said: "Now, everyone will get a slice of the pie, pardon the pun." Employee Ownership Trusts (EOTs) are a Government initiative aimed to promote employee ownership by giving business owners the opportunity to sell their shares to an employee owned trust free from capital gains tax. According to global accounting firm Price Waterhouse Cooper EOTs do not involve direct share ownership by employees, rather a controlling interest in company is transferred to an all-employee trust which is then held for the benefit of employees. The first Parsons Bakery was opened in Clevedon nearly a century ago, followed by a second in the third-generation, family-run business, has shops in Gloucestershire, Wiltshire, Somerset, Oxfordshire, Worcestershire, Berkshire, Bath, Bristol and in in the last few years, majority share holders Nick and Nicola Parsons have stepped back from the it is hoped a John Lewis-style trust will ensure the bakery will remain independent and "rooted in the communities it has served" for 99 years."For generations, our family has been at the heart of this business, but we've always known that our employees are what truly make it thrive," said Mr Parsons."Now, as we take a step back, we do so knowing Parsons is in the best possible hands - those of the people who bake, serve and keep it running every day." 'New energy' Retail director Lee Insull-Griffith, said the Parsons family have "put their trust into the employees" and staff are feeling "more united then ever" by the move."There's a new energy because for hundreds of years [employees] have represented the Parsons brand but today we are the Parsons brand," he said."The trust will make sure that everything we do is in the interest of the employees and ultimately the results we achieve as a business are shared amongst those employees."
