Quick! Raise your hand if you remember the SECURE Act (Setting Every Community Up for Retirement Enhancement Act of 2019). It was signed into law on December 20, 2019 (for those keeping score, it passed the House with a vote of 297-120). December 2019 seems like a LONG time ago. Prior to ...
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How to Use a PPP Loan to Refinance ESOP Loans
Now that Congress and President Biden have extended the PPP loan application deadline to May 31, 2021, there is still time for ESOP-owned companies to consider using a PPP loan to refinance their ESOP loan. Depending on the size of the ESOP loan, a PPP loan can provide enough cash to pay off bank ...
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Is an ESOP Right for Your Business?
An ESOP can be a good option for business owners who want to transfer the ownership of their company over time. These are the top four questions we receive from clients who are starting to investigate an ESOP.
How do we find out if an ESOP is a good fit for us?
Whether an ESOP is a good fit ...
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M&A Benefits – How to Avoid an Employee Benefits Train Wreck in Your Next Deal
If the closing date is approaching on the purchase/sale of your or your client's company and you still don't have a plan for transitioning employee benefits, the result can be a train wreck. The seller can end up with liabilities they didn't expect and the buyer can end up with unhappy new ...
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ESOP Feasibility vs. Suitability
Hello Mr. Long… We're thinking about doing an ESOP and heard that we need a feasibility study. Do you do that? That's the way these conversations usually start. The client is thinking about an ESOP and may have been told that the first thing they need is a feasibility study, and perhaps an appraisal ...
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How An ESOP Program Is Put Together – Some Assembly Required
Updated February 8, 2021
Unlike the typical 401(k) plan, ESOPs aren't an "off-the-shelf" retirement plan.
Until recently, each ESOP plan had to be individually designed to serve a specific set of purposes. The IRS recently allowed ESOP plan documents to be more like a 401(k) plan – with ...
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The Truth About S Corporation ESOPs
In 1996, Congress enacted legislation[1] that for the first time permitted an employee stock ownership plan (ESOP) to be an eligible S corporation shareholder, effective for tax years beginning after December 31, 1997. In 1997 the law was modified further to facilitate ESOPs becoming S corporation ...
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Who Are the ESOP’s Trustees and How Do I Determine That?
ESOP trustees are selected by the Board of Directors. Watch our video to learn more about how to choose your ESOP trustees.
ESOP Trustees
The law requires the board to be responsible for the prudent selection, monitoring, removal, and ultimately, replacement of the trustees. The ...
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Who Is Legally Responsible for Valuing the ESOP Stock?
The ESOP appraisal process is the legal responsibility of the trustee. Learn more about the process in this video.
ESOP Valuation
The ESOP trustee is the owner of the shares and must report the value of the stock annually. The trustee is also required by law to use a ...
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Confused by the terminology? Check our Glossary of Terms