Employee Ownership Trusts (EOTs) are built for permanence: the company is meant to stay employee-owned and mission-aligned for the long term, so the structure deliberately makes a casual sale difficult. An EOT is not an absolute lock, though. A sale can generally still happen when it is genuinely warranted.
A few things govern whether and how a sale can occur:
- The trust documents. The trust instrument sets the conditions under which the company (or the trust's stake) could be sold, for example financial distress or a clear benefit to the employee beneficiaries. Some trusts make this intentionally restrictive.
- The trustee's fiduciary duty. Because the trustee must act in the beneficiaries' best interest, any sale has to be consistent with that duty. It cannot simply serve a departing founder or an outside buyer.
- The purpose of the EOT. The whole point of holding the company in trust is to resist short-term sale pressure, so the bar for a sale is usually high by design.
How restrictive to make this is a key decision when the trust is drafted. If preserving the option to sell under certain conditions matters to you, raise it with counsel up front. This is a legal-design question, so confirm the specifics with an attorney experienced in employee-ownership transitions.