The move saw previous owner Laurence Odie sell 100 per cent of his shareholding in the business, based in Hoswick on Shetland’s south mainland, to an employee ownership trust (EOT).

The company, which currently employs 14 people, exports 83 per cent of its production with the Far East and North America among the main markets.

Chris Kerr, corporate partner with Harper Macleod LLP, advised the company on the transition.

He said: “A sale to an employee ownership trust can be an ideal option for business owners who are looking to set an exit strategy, realise some value in the business, but are not quite ready to leave the company behind. It’s particularly attractive to Highland and Island business owners, where there may be a strong tie to the local area and retaining ownership in the community is an important factor.”

“Laurence Odie Knitwear is an excellent example of a local company, employing a significant number of people, where sustainability and employee interests were the key drivers in the sellers’ succession planning. The EOT route isn’t for everyone, and it’s key that the sellers’ aspirations are surfaced and alternatives explored.

“What is important is that business owners are making an informed choice when it comes to their exit strategy. Harper Macleod LLP are well placed to advise on the available options, supporting clients in making the right decision for them, and for the future of their business.”

Mr Odie said: “Chris Kerr, supported by Craig McKerracher, ensured that the process went as smoothly as possible. They guided us through the transaction and explained it all so well that we knew what we were agreeing to. We particularly appreciated that they took care to listen to what we wanted, incorporating specific requests into the deal. I would recommend any business owner considering their succession plans to speak to the team at Harper Macleod.”

The EOT brings certain tax advantages, among them that the transaction is completed free of capital gains tax for the seller, and that the company is able to pay a bonus to employees, of which £3,600 can be tax free each year.

Chris Kerr added: “It’s a relatively straightforward transaction. The EOT is set up to buy the shares from the seller. The purchase price is usually funded from company profits, either directly to the vendor or by means of a loan from an external funder.

“Indeed, many of the mainstream banks are keen to lend to these kinds of transactions, and there also exists specialist lenders for employee buyouts. Moreover, because the employees and the seller usually have the best interests of the company at heart, then it can be a very collaborative transaction, with none of the adversity you sometimes find in corporate deals.”