First of all, what is a Co-ownership Model? In essence, it means rather than conventionally employing staff, your workers are co-owners.
This can have a number of advantages – your workers are directly invested in the business, and accordingly share in the profits; there’s a lot of evidence that this drives motivation, as staff see a direct financial benefit from the success of the company. Put simply, firms with co-ownership models grow faster and tend to be more productive.
There can also be some strong tax advantages, depending how you build your model. As equity-stake co-owners, your staff can receive dividends, proceeds of MBO sales or profit-share instead of conventional salary. As these forms of income are taxed differently, this can allow them to use tax efficiencies to maximise their income whilst also helping you to reduce your national insurance costs.
That’s not to say the model isn’t without some controversies – you’ll have seen press articles covering the debate over whether firms like Uber are actually employing their individuals or not, but that largely stems from the manner in which their schemes are constructed. If you offer your co-owners the same benefits as an employed person, the controversy disappears.
However, you must consider how much democracy this will bring; as shareholders, your staff have much more of a say in the running of the business and that can prove challenging where decisive actions are concerned.