Employee stock ownership plans (ESOPs) offer business owners a flexible option for liquidity, business succession and incentivizing employees.
Change is hard to initiate even when we know the results will be better for us. This is true when there are signs that our ESOP valuation firm is no longer providing the necessary professional assistance. Our reluctance fades however, if warning signs begin pointing to increased risks for our company.
When: January 24, 2019
Where: Miami, FL
Succession Planning for Builders & Contractors
Listen as Will Stewart of PCE and Dean Mead ESOP attorney, Jay Van Heyde, discuss the key benefits of creating an ESOP for founders and owners in the construction industry.
Congress created ESOPs (Employee Stock Ownership Plans) to foster employee ownership so that employees might share in their employers’ successes. To entice owners to implement ESOPs, the proceeds of the sale of the company’s shares to an ESOP are tax deferred, so long as certain requirements are met.
Congress has chosen to bestow a variety of significant tax benefits on business owners and companies that participate in a special ownership structure. Because it is very difficult for a fully taxable ownership structure to compete with a tax-advantaged structure, many business owners should evaluate the possibilities under this special structure, known commonly as an Employee Stock Ownership Plan (ESOP). The ESOP structure provides shareholder and corporate tax benefits which require proper consideration and transaction structuring to ensure maximum benefit.
Often business owners who are interested in bringing liquidity to their holdings seek only a sale to disinterested third parties. And that frequently works out just fine for both the buyer and seller. But sometimes the personal emotional strings attached to the business, whether on the surface or not, are simply too strong to break the ties and turn control over to “the new guys on the block.”
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