An Employee Stock Ownership Plan (ESOP) is a qualified retirement plan that allows employees to receive an ownership stake in their company, usually without having to pay for the stock.

ESOPs are funded with tax-deductible contributions by an employer in the form of company stock, or with cash that’s used to purchase company stock.

Effective as corporate financial tools, ESOPs are the only tax qualified retirement plan that can be leveraged to provide liquidity to current shareholders.

Advantages to becoming an ESOP:

  • Provides liquidity for retiring business owners
  • Provides employees with a stock-based benefit plan
  • Provides tax advantages for shareholders selling stock in a closely-held C corp
  • Provides for business continuation
  • Provides a market for thinly traded stock
  • Provides a way to motivate and retain employees

If you’re considering an ESOP, we can answer your questions or help with the transition. Just contact us to learn more.