Employee stock ownership plans (ESOPs) provide flexible and efficient mechanisms for addressing the succession and estate planning challenges of business owners, building employee engagement and creating real economic value in companies and communities. However, business owners who wish to explore the formation of an ESOP for their companies are immediately confronted with their first challenge: Finding expert and independent advice. This is particularly the case in the area of ESOP formations, because of the highly specialized legal expertise required to ensure tax and ERISA code compliance.
Hiring an ESOP attorney is, therefore, a logical first step.
Business owners should bear in mind that whichever expert you turn to first in your quest to decide if an ESOP is right for your company, it has been our experience that there will likely follow a cascading effect from that advisor’s selection – specifically, in terms of the appointment of the other transaction advisors – that will have important and potentially far-reaching consequences for the ESOP’s viability. Therefore, we urge you to read this article to gain an understanding of these implications before selecting your advisor.
Read the full article here.