Introduction
An Employee Benefit Trust (EBT) is a legal arrangement where companies place shares in a trust for their employees' future benefit. The shares are held by either a trustee (in a formal trust structure) or a nominee (in a nominee arrangement) until specific conditions are met. Both structures offer flexibility in equity distribution while providing potential tax advantages in certain jurisdictions.
This guide will walk you through setting up an EBT in Ledgy, whether you're using a formal trust with trustees or a nominee arrangement. The process mirrors creating a standard equity pool and plan, with the key distinction that a trustee or nominee holds the legal rights while employees are designated as beneficiaries within the grants.
Overview of the EBT Setup Process in Ledgy
Creating a Pool designated for the EBT
Adding the Trustee or Nominee as a stakeholder in Ledgy
Setting up an Equity Plan under the EBT pool
Granting equity to employees as beneficiaries
Let's walk through each step in detail.
Step 1: Creating an EBT Pool
Navigate to Equity Plans > Pools & Plans page
Click on the "Add pool" button in the top right corner
Fill out the relevant fields:
Name your pool (e.g., "EBT Pool 2025" or "Nominee Pool 2025")
Enter the creation date
Select the underlying share class
Specify the amount of fully diluted shares allocated for grants
Note: This amount should reflect the initial allocation at the time of pool creation, not necessarily the current allocation
Optionally upload any relevant documents (trust deed or nominee agreement) or add internal notes related to the EBT
Click Save
Step 2: Creating an Equity Plan Under the EBT Pool
Go to the Equity Plans > Pools & Plans page
Click on the "Add plan" button in the top right corner
Fill out the plan details:
Enter a descriptive plan name (e.g., "EBT Equity Plan 2025" or "Nominee Equity Plan 2025")
Select the creation date
Choose the EBT pool you created in Step 1
Select the appropriate grant type
Optionally, set up Grant presets to define standard parameters for grants under this plan (e.g., vesting schedule, exercise price, document templates)
Click Save
Step 3: Adding the Trustee/Nominee and Employees as Stakeholders
Both the trustee/nominee (who holds legal title to the shares) and the employees (who are the beneficial owners) need to be added as stakeholders in Ledgy. Despite employees not being direct legal stakeholders in an EBT structure, they need to be added to Ledgy to be involved in transactions. Think of the Stakeholders page as a central repository of all economic agents and their details, rather than just a list of legal shareholders.
Option A: Adding a single Trustee/Nominee or Employee
Go to the Stakeholders page
Click on the Add stakeholder button
Provide the name of the stakeholder (trustee/nominee or employee)
Select Legal entity for trustees/nominees or Natural person for employees
Fill out any additional required fields
Click Save
Repeat as needed for all stakeholders
Option B: Importing multiple Trustees/Nominees or Employees via Excel import
On the Stakeholders page, click on the Import button in the upper right corner
Select the template for Legal entity (for trustees/nominees) or Natural person (for employees)
Click Download template to get the Excel template
Fill in the details for the trustees/nominees or employees
Save the Excel file
Upload the file by dragging and dropping it into the import box or clicking on the Excel icon
Click Import now
Step 4: Granting Equity to Employees as Beneficiaries
When setting up grant transactions, you'll assign the trustee or nominee as the legal holder while specifying employees as beneficiaries:
Go to the Ownership > Transactions page
Click on Import at the top and select "Option, Phantom, or Warrant" template
Download the Excel template
In the template, for each grant:
Specify the trustee or nominee as the stakeholder receiving the grant
In the Beneficiary column, enter the employee who will be the beneficial owner
Specify the plan as the Plan you created in Step 3
Fill in any other required details (grant date, amount, etc.)
If your plan has presets configured, you can leave relevant columns blank to use those default values
To override any plan presets for specific grants, simply populate the relevant columns
Save the Excel file and upload it to Ledgy
Review the imported grants and confirm they're correct
Cap table reporting
Ledgy's cap table functionality provides flexible reporting options that are particularly valuable for EBT structures. By default, the cap table groups equity by Stakeholder however, you can customise your view to gain deeper insights into your EBT structure:
Customising the Cap Table View
Navigate to your cap table view via Ownership > Cap Table
In the cap table grid, enable the Beneficiary column via the Columns menu on the right
Scroll to the far-right of the grid and drag and drop the Beneficiary column header just above the grid next to the Stakeholder grouping
Expand all rows by clicking 'Expand All' to display both nominees and economic rights holders
You can save the custom grid view by clicking 'Save as new view'.
