OUR JOURNEY

spacerThe Centre was founded in 1990 to provide education and training for co-operatives. Over time, we have evolved in response to emerging needs and opportunities, influenced by our growing knowledgebase and by the skills and interests of our people.
  • A look at the theme of ownership which connects our work
  • How we decided on our name and what it means
  • Our approach to the people we work with
  • Our key strengths
  • Central to the work the Mercury Centre are our values

WHAT WE DO

spacerThe Mercury Centre specialises in building collaborative enterprises through consultancy, research, information, advice and training. Our activity areas are:

We act as “ownership architects” and help people and organisations move from concept to implementation. We provide a range of services including ownership planning, community buyouts, business succession and employee ownership.
We work with boards and management to deliver practical governance solutions.
Our approach to the people we work with

We work with communities to develop economic sustainability at a local level.

RESOURCES

spacerThe resources area of our website provides range of information sheets, publications and links which we hope will be useful in helping people understand and learn about for our interest areas.
  • Includes ownership planning, community buyouts, business succession and employee ownership.
  • For boards and management.
  • For new and existing co-operatives.
  • Local communities and economic sustainability.

FROM OUR PERSPECTIVE

spacerFrom our work we believe we have gained insight into a number of matters and wish to share our view with visitors to this site
  • Examining economic empowerment and the building of social capital

COMMUNITY LINKS

spacerThe Mercury Centre supports the following community activities:
spacerAn Institute dedicated to the Cultural Commons
Web pages about a two day symposium with the themes Affordable Housing - Sustainable Communities held in Petersham Town Hall, Sydney February 2008
People with lived experiences of mental health issues who live in the community who provide and promote peer support and conduct a range of activities according to the interests, hopes, dreams, and goals of those who participate.
 
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ESOP

Employee Share Ownership Plan

The Mercury Centre now has available an "ESOP Model" that can assist retiring small business owners to transition their businesses to their employees as part of a succession plan. 

The Mercury Centre is working with its associated company "Equity Plan Pty Ltd" to deliver this ESOP service.

It is important to first note with regard to this model, that an ESOP enables a business to be transitioned to its employees out of the future earnings of the business rather than the current savings of the employees.

As a vehicle for business succession or an employee buyout of an existing business, the ESOP approach involves the following steps. (Establishing an employee equity stake in a new venture of course, can be done from the very beginning).

1. ESOPs are a "horses for courses" approach. There are a number of things that would have to be considered about the circumstances of each business before proceeding. ESOPs are built to suit the business and the requirements of the owners - both new and exiting - and may in fact be a combination of various employee share plans and incentive schemes suitable to segments of the workforce. The size of the business and the numbers involved in the share plans also have an impact.

2. There are a couple of options for you to consider if you think that an ESOP might be the way to go for any of your business succession projects:

i) You can sell the business to the employees over 5 to 10 years where the ESOP is funded by employer contributions alone (a gradual buyout), or

ii) You can sell over 3 to 5 years if the plan is a leveraged ESOP where funds are borrowed to pay out the owner(s) at an early stage and the ESOP trust pays off the loan over time using employer contributions. (For this to occur, the business must have a good cash flow to service the debt).

3. Company contributions to ESOPs can be tax-deductible.  ESOP contributions can be exempt from fringe benefits tax. Employee shares acquired through an ESOP may benefit from the general 50% capital gains tax discount. An employee with a more than 20% interest may benefit from the small business tax concessions. For the exiting owner, capital gains discount and/or small business tax concessions may be available.

If you want to proceed further along these lines, there will be a point when you will need formal tax advice. Our associated company, Equity Plan Pty Ltd, has the qualified professionals who can provide this.

On questions of detail, plan design and ESOP technical matters, you will need to work with Equity Plan to progress these, if you choose this path for any of your projects.

If there are any projects where The Mercury Centre could possibly assist on ESOP based business succession, please contact Alan Greig at the address or phone number on our "Contacts" page.

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