Employee Benefit Trust
Employee share ownership Trusts (ESOT's) are based on an Employee Benefits Trust (EBT). They are established by a company, the beneficiaries being directors and employees of the company. The ESOP is used a vehicle for acquiring and storing shares in the company. These shares are ultimately used to satisfy the company's obligations, under its employee share schemes, to issue shares to employees thus avoiding equity dilution. The trust can also effectively provide a "market" in the company's shares.

Easyform Glossary of Law Terms. — UK law terms.


employee benefit trust
(EBT)
A trust established to hold shares in a company for the benefit of employees of the company, and complying with certain conditions prescribed by legislation.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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