Employee Stock Ownership Plans, or ESOPs, were designed as a way to put ownership into the hands of American workers. Begun in 1974 with the passage of federal laws, ESOPs comprise an estimated 11,000 companies in the US, employing an estimated 11.5 million workers. The laws enacted to encourage employee ownership allow certain incentives for lenders, selling owners, and ESOP companies. The tax advantages of ESOPs often make them a lower-cost source of corporate financing than conventional sources.
An Employee Stock Ownership Plan, or ESOP, is a qualified benefit plan with special features. These features make ESOPs quite different from other types of retirement plans. Created in 1974 under federal law, ESOPs must meet governmental regulations issued by the Department of Labor (DOL) and the Internal Revenue Service (IRS). For more information about what an ESOP is click here
Whether you are exploring employee-ownership as a strategy for stable business succession or a tool for tax-advantaged corporate financing, you should begin by assessing your philosophical beliefs and personal comfort level with the underlying concepts of employee-ownership. If communicated effectively and coupled with participation, employee ownership can also be a powerful tool to motivate employees. ESOPs can used as a Competitiveness Strategy; a Business Succession Plan; a Strategy for Tax-Advantaged Corporate Financing; or a Means to Avert Plant Shutdown. To learn more about whether an ESOP is right for you click here.
Below are webinars covering various topics important to consider when selling your business to your employees using and ESOP. You can watch the videos by clicking on each image.
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