ESOP Feasibility - ESOP Knowledge Center
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ESOP Feasibility

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Who determines the value of company stock in the ESOP?
Valuation of company stock in the ESOP must be made by an independent appraiser annually, and any time the ESOP purchases company stock from the company or an employee, officer, director, or 10% or greater shareholder. The DOL and IRS have issued guidance on the factors that must be taken into account when appraising a... Read More


What costs are involved in establishing and maintaining an ESOP?
Costs are a function of the complexity of the transaction. If owners take the time to get a better understanding of ESOPs, initial costs can be reduced. Ongoing ESOP administrative expenses are similar to most profit sharing plans, with the exception of the annual valuation update needed to value company stock held in the ESOP.... Read More


Can an S corporation set up an ESOP?
Yes. Effective January 1, 1998 it became advantageous for an ESOP to be a shareholder of an S corporation under the federal tax laws. To the extent that the S corporation is owned by an ESOP, no federal income taxes on corporate income are payable by either the shareholder or the company. This can create... Read More


Business Succession Planning for Engineers & Architects
Business Succession Planning for Engineers & Architects An Employee Stock Ownership Plan is a unique liquidity and exit strategy for owners of engineering and architecture firms seeking to diversify wealth, maintain control and perpetuate their legacy. Learn what an ESOP is and if its appropriate for you, tax incentives for C and S corporations and... Read More


Nuts & Bolts of ESOP Sustainability
According the National Center for Employee Ownership, there were approximately 10,900 ESOPs in the United States at the end of 2011. Fifteen years ago when I started working in this field, the number was approximately 11,000. The number of ESOPs suggests little or no growth in employee ownership, but the assets held by ESOPs tell... Read More


Is an ESOP Right for You?
Is an ESOP Right for You? Business owners are increasingly turning to ESOPs as a corporate finance tool to provide for liquidity and succession. For the business owner, an ESOP is a way to create liquidity, preserve company independence, protect wealth, diversify assets, plan for an orderly and phased succession, and defer taxes. For employees,... Read More


ESOPs: A Business Succession Planning Tool Worth Considering
Employee Stock Ownership Plans (ESOPs): A Business Succession Planning Tool Worth Considering An ESOP is a powerful business succession plan. It provides a means for a business owner to transfer ownership of a company to his or her employees while still retaining some control and value in the business. Is an ESOP right for your... Read More


Business Succession Planning and the ESOP Alternative
Business Succession Planning and the ESOP Alternative An Employee Stock Ownership Plan or ESOP, is a tax-qualified retirement plan that invests primarily in employer stock, writes Jim Steiker. However, ESOPs offer much more than just employee benefits. To owners of closely held contractor firms, an ESOP can be used as a tool of corporate finance... Read More


Business Succession Planning & ESOPs
Business Succession Planning & ESOPs An employee stock ownership plan (ESOP) may make sense for some dealers and other aftermarket retailers looking to build a succession plan they can control while protecting wealth, diversifying assets and deferring taxes. Is an ESOP right for your company? Use our ESOP self-assessment tool to find out. Explore various Ownership Transition... Read More


Are ESOPs Really More Complex Than Other Ways to Sell a Business?
Are ESOPs Really More Complex Than Other Ways to Sell a Business?  This table from The National Center for Employee Ownership (NCEO) compares the complexity, risks, and flexibility of selling a closely held company to an ESOP compared to selling to a third party.  It is based on the advice of a number of experts... Read More


8 ESOP Myths Debunked
>When considering employee benefit and owner succession plan alternatives, business owners often overlook the possibility of an ESOP: an Employee Stock Ownership Plan. In an ESOP, the company establishes a trust which invests primarily or completely in the stock of the company. Employees become vested in this stock, giving them an ownership and financial interest... Read More


4 Signs That You May Be Ready to Plan for Your Business Transition, Part 2
Successful business owners are unique in their abilities to manage many aspects of their companies, all towards a successful, profitable outcome. In the day-to-day battles and pursuits to advance your company, it is unlikely that you stop to think about its future transition. Despite the fact that you may not be pro-actively thinking about the... Read More


4 Signs That You May be Ready to Plan for Your Business Transition, Part 1
Successful business owners are unique in their abilities to manage many aspects of their companies, all towards a successful, profitable outcome. In the day-to-day battles and pursuits to advance your company, it is unlikely that you stop to think about its future transition. Despite the fact that you may not be pro-actively thinking about the... Read More


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