The First Trust Settlement, 1929
Birth of the Partnership
On the 18th April 1929, John Spedan Lewis signed the First Trust Settlement, a document effectively legalising the John Lewis Partnership. Sure enough, a few days later, the John Lewis Partnership Limited came into physical existance.
Profits passed to employees
According to the settlement, Spedan Lewis transferred to trustees his own shares in John Lewis, Peter Jones and the Odney Estate. This meant that any profits made were to pass straight to the trustees for distibution amongst the employees. Before, all profits would have been available to himself.
A 21 year experiment
The business was at this point worth £1 million. In exchange, Spedan took interest-free bonds totalling £1 million, repayable out of profits over 30 years. At his point he retained complete practical control of the business for an indefinite period, through the retention of ordinary shares in the John Lewis Partnership.
Second Trust Settlement
Spedan Lewis brought this experiment to an end in 1950 with the Second Trust Settlement, transferring to the trustees all his remaining shares and his ultimate control.