Lanarkshire-based pastry maker William Sword has announced plans to move to an Employee Ownership Trust (EOT) structure, giving its 85 staff ownership of the company.

William Sword supplies pastry to pie makers, food manufacturers and supermarkets, and owns The Scottish Soup Co, Scotland’s largest chilled soup brand.

The current owners, brothers Douglas and David Sword, have decided to step back from management after more than 40 years. They will remain as consultants to the business.

Douglas Sword said the pair felt it was the right time to step back, but that a trade sale did not interest them, as it may have led to distant owners or jobs at risk.

“We wanted to give something back to the people who have worked so hard for us,” he said. “Transitioning to an EOT allows us to do exactly that, and our customers also benefit from continuity of supply.

“It has benefits to us, but also to the staff, who are now in control of their own destiny. The business is in their hands now. We are sure they will continue to grow and be successful.”

EOTs are a UK government-supported ownership structure in which employees are members of a trust that holds the majority of their company’s shares. This differs from a worker co-operative, in which each member has a direct stake in the business; under an EOT, the company’s board of directors remains responsible for day-to-day operations.

To encourage transition to an EOT, owners can claim a 50 per cent discount on capital gains tax from the sale. The structure also allows the company to pay tax-free bonuses of up to £3,600 per employee.

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