This article describes the use of reverse allocations in Employee Stock Ownership Plan (ESOP) companies to provide a meaningful number of shares for newer and younger employees and to help ensure the ESOP's sustainability.
ESOPs reward longevity and provide a meaningful stake in a company's ...
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ESOP Planning: How Many Shares Should the Owner Sell
Figuring out how many shares to sell to the ESOP is a fundamental decision part of the planning process. The article looks at some of the factors in play.
How Many Shares to Sell? What are Your Goals?
Owners are often surprised that the decision-making process involved in determining how many ...
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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 sharing ...
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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
Any ESOP attorney or consultant can tell you that 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], ...
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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?
As ESOP attorneys, 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 ...
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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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