Figuring out how many shares to sell to the ESOP is a fundamental decision in planning for an employee stock ownership plan (ESOP). Owners are often surprised that this decision-making process helps them clarify their short- and long-term goals for both themselves and their companies. A number of ...
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ESOPs: The Three Types
This article will acquaint you with the utility of the ESOP as both a technique of corporate finance and an employee benefit plan. It is important to note, however, that there are other employee benefit plans that can be used to invest in stock of the employer sponsor. There are profit ...
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Five Ways ESOPs Fit Your Succession Plan
An ESOP can be a powerful succession planning tool for your business. But relatively few advisors in the marketplace know enough about ESOPs to give you the information you need. We'll give you a head start. Here are five ways an ESOP can fit, or even drive, your succession ...
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ESOP Distributions: Problems to Avoid
ESOP distributions can be the most complex and challenging area of ESOP design and administration. As discussed in detail in our articles Designing And Drafting ESOPs[1], and Avoiding ERISA Liability Issues In ESOP Repurchase Liability Planning[2], ESOP sponsors and fiduciaries must be extremely ...
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No Fooling: New Rules For SBA ESOP Loans Took Effect April 1
The changes that the Main Street Employee Ownership Act made to the Small Business Administration's lending rules for ESOP transactions are now in effect. The revised rule makes an SBA loan potentially more attractive for sellers who want to sell their companies to an ESOP but do not ...
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Aren’t ESOPs Expensive?
We hear this question all the time. Aren't ESOPs expensive? Aren't they complicated? Well, that's actually the wrong question to ask. The right question to ask is this:
How do the costs and details of an ESOP transaction compare to a transaction where you sell your company to a private equity ...
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SBA-Guaranteed Loans For Employee Stock Ownership Plans: Big News For Small Business
Inside the recently signed $717 billion, Fiscal Year 2019 John McCain National Defense Authorization Act is a small provision that has nothing to do with national defense but a lot to do with a big opportunity for small businesses and lenders.
Originally proposed as the Main Street Employee ...
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Eligible Individual Account Plan: The Other Employee Stock Ownership Plan
Some companies want a way to get stock to the broader base of their workforce (with some extra "oomph" for their senior people), that is deductible and coordinates with their existing shareholder strategies, but that isn't as complex as an ESOP. Yet others see the significant additional tax benefits ...
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ESOP Trustee Indemnification: Three Things To Remember
In this article, we're revisiting three court cases involving ESOP fiduciary indemnification that left some head-scratching over when and how an ESOP company can indemnify its ESOP trustees. This year being the fifth anniversary of the last decision, Harris v. GreatBanc Trust ...
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