Building the Best Solution for Each Business
Using a Feasibility Assessment & Transaction Analysis, SES Advisors can help you determine whether an Employee Stock Ownership Plan (ESOP) would fit well with your corporate and shareholder goals and, if so, how an ESOP would best be structured to suit those goals. Once you have decided to implement an ESOP at your company, SES Advisors offers comprehensive services and support to guide you through the design and installation of your ESOP.
Whether you are considering using an ESOP to effect a transition in share ownership or expect to install an ESOP to consider a transaction in the future, the process of designing and implementing your ESOP includes a number of critical steps:1
Designing the plan.
Like other qualified employee benefit plans, ESOPs must comply with applicable laws, including ERISA. Within the specified legal rules, plan sponsors must make important decisions regarding the plan terms to make sure that the ESOP fits well into the companys corporate culture, cash flow needs and strategic goals. Legal counsel should be consulted to prepare the required ESOP plan documents, including the agreement with the ESOP Trustee.2
An ESOP is the only benefit plan permitted to borrow money. Your company may expect to complete a transaction where the ESOP borrows money to purchase stock, either from the company or from a selling shareholder. A leveraged ESOP transaction requires compliance with certain legal requirements. In addition, the company may need advice about how best to obtain the necessary financing for the transaction, whether from the seller or from an outside lender.3
Structuring an effective transaction.
Once you have decided to effect an ownership transition using an ESOP, SES Advisors can help you structure a transaction that will best meet the goals of the company and the selling shareholders. SES Advisors professionals are knowledgeable about all aspects of the ESOP transaction, including the parties involved, the timing and the steps.