What is Employee Ownership?

An employee-owned business is owned and controlled by its employees. While there are a number of legal entity options – cooperative corporations, LLCs, trusts – they all share equity ownership that gives employees real risk and reward, and a path for employee participation to voice their desires, and to improve their work life.

Small businesses that are employee-owned are often organized as worker cooperatives – value-driven business that put employees and community benefit at the core of its purpose. The central characteristics are:

  • Workers own the business and participate in its financial success on the basis of their labor.
  • Workers vote for their representation on the board of directors, with the principle of one worker, one vote.
  • In addition to their economic and governance participation, worker-owners participate in day-to-day management structures.