There are various ways to involve employees in the capital of a company during a transaction.
Classic Management Buy-Out (MBO).
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The company is transferred to one or more key executives, who continue managing operations while becoming shareholders. However, the company does not fundamentally change its legal status or management model.
Worker Cooperatives / Employee-Owned Cooperatives (Scop).
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These cooperatives are distinguished by the fact that all employees are shareholders or eligible to become such, with staff holding the majority of the equity. Worker cooperatives generally operate on a "one person, one vote" principle, aiming to introduce workplace democracy. Power, risks, and profits are shared equitably. Consequently, annual profits are allocated in part to employees (via profit-sharing) and to employee-cooperators (via dividends), alongside sufficient reserve allocations to strengthen the company's equity base. When a cooperating employee exits, they retrieve their initial contribution without capital gains.
Originating in France, where the tax framework is particularly attractive, worker cooperatives are beginning to emerge in Belgium. Driven by the Union of Worker Cooperatives Wallonia-Brussels (Uscop), information is being disseminated () and prospective cooperators receive guidance in structuring their projects.
In Belgium, worker cooperatives do not have a specific dedicated legal status and therefore utilize existing legal forms, frequently adopting the SCRL/CVBA structure. However, the Walloon Region has implemented several mechanisms to incentivize worker-owned cooperatives:
Brasero.
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In place for approximately two years, this measure doubles the investment for every euro contributed by a cooperator. Financing is granted through Sowecsom, a entity dedicated to social economy and cooperative projects. Projects must meet strict criteria, notably demonstrating financial viability. Cooperators buy back this participation (exit) after 5 to 10 years.
Portage (Equity Warehousing).
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Launched on December 1, 2016, and currently under implementation, this new mechanism goes even further: Sowecsom fully finances the equity contribution for employees lacking personal capital. This contribution is then gradually reimbursed over a 5-year period.
Guarantee.
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A third support mechanism, also introduced on December 1, 2016, provides a 75% guarantee on a basket of microcredits (up to €25,000 per employee-cooperator). This initiative is managed by Sowalfin, another Walloon Region financial vehicle.
Advantages and Drawbacks of Employee Ownership
Because employees naturally possess deep institutional knowledge of the company, operational risk is reduced. This structure provides reassurance to financing banks, clients, and suppliers alike. Employee involvement in company strategy can also enhance social cohesion and workplace dynamics, while offering a long-term savings vehicle for participating households to boost their purchasing power.
However, employee ownership carries certain drawbacks. Disparities in investment participation among staff, or significant appreciation in share value, can create friction or conflicts of interest. In the event of severe financial distress, employees risk losing not only their jobs, but also their personal savings. Proper structuring is therefore essential for any new project.
From a broader philosophical perspective, transferring a business to its employees bridges the traditional divide between capital and labor. Some even view this approach as the most sustainable form of succession—much like the business owner in Alsace who gifted his tree-care company to his team while remaining active as an advisory consultant. As these initiatives multiply, they may well foster more balanced and harmonious economic development for all stakeholders.
* Source: European Federation of Employee Share Ownership (EFES)
** For more information, a symposium will be held on March 21, 2017 at 3:30 PM in Namur. Details available on the Uscop Wallonie-Bruxelles Facebook page.
