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 ...
[Read more] about SBA-Guaranteed Loans For Employee Stock Ownership Plans: Big News For Small Business
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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When to Choose an ESOP Succession Plan Over a Conventional Exit Strategy
Employee stock ownership plans (ESOPs) offer a number of advantages to sellers, companies and employees. ESOPs are a flexible tool for corporate and shareholder succession and offer benefits no exit strategy can match. However, those unique advantages are only worthwhile for those who find the very ...
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Withdrawal Liability: Heavenly Hana LLC v. Hotel Union & Hotel Industry of Hawaii Pension Plan
In what should serve as a clear warning to buyers acquiring assets involving multi-employer pension plans (MEPs), the Ninth Circuit Court of Appeals' June 1 decision put the onus on buyers to ensure that withdrawal liability is accounted for during an asset sale.
In a Transaction, Think of ...
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How Much Revenue Must A Company Have To Be Big Enough For An ESOP?
We look at three measures of revenue for ESOP suitability purposes:
Earnings before interest, taxes, depreciation, and amortization (EBITDA);Free cash flow; and,Taxes paid.
EBITDA
EBITDA is usually the most significant measure appraisers use to determine the value of the company. The higher ...
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Employee Benefits Plans in Mergers And Acquisitions
When businesses are bought, sold, merged, or reorganized into or out of existence, qualified retirement plans must be dealt with. This article provides an overview of some of the most common decisions faced by both buyers and sellers, acquirers and target companies; that is, what to do with the ...
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Retirement Plan Distributions: A Question of When
Two questions were at the heart of a retirement plan court case that was decided in 2018:
When is a retirement plan distribution a distribution?Is a retirement plan distribution subject to state law or the federal Employee Retirement Income Security Act (ERISA)?
Majors Plastics is a 100% ...
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The Key Differences Between ESOPs and Other Retirement Plans
Employee stock ownership plans (ESOPs) are retirement plans. As such, ESOPs are required to follow all the basic rules for tax qualification and non-discrimination that other retirement plans such as 401(k)s must follow. Like a 401(k) plan, ESOPs also let participants roll their distributions over ...
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Confused by the terminology? Check our Glossary of Terms