October 2, 2020
An employee stock ownership plan (ESOP) offers you the opportunity to secure your business legacy in a variety of ways. There will always be a tax-exempt buyer for the stock of your company, and you can continue to guide the culture that has benefited your employees and customers over the years. Plus, you will have the financial liquidity to assure that the needs of both your family and your charitable interests have been secured.
Furthermore, you will be free to choose both the future management of and your future role in the business that you have nurtured for many years. After you sell to the ESOP, there is no need to watch from the sidelines unless you choose to do so.
Yes, you can lead the transformation of your business with an (ESOP) that will provide you great after-tax sale proceeds and guarantee continued care for your family, your employees and your customers. Look at these benefits of an ESOP:
- Create a perpetual tax-exempt market maker for the stock of your company.
- Eliminate capital gains taxes upon the sale of your stock.
- Minimize estate taxes and preserve family wealth.
- Assure the continuity of management and company culture.
- Eliminate federal income taxes on company profits.
- Assure continued care for company employees and customers.
- Grow the family in a family-owned business.
After the ESOP transaction, you can continue to manage the business and continue to build the “ownership culture” that has proven to be the key factor as to why ESOP companies out-perform their non-ESOP counterparts. Employees soon realize they have a “piece of the action” and eventually the “family” in the family business grows to include customers and all other ESOP stakeholders.
If you would like to discuss ESOPs or other business succession solutions for your business, please reach out to us, and we would be happy to help.
Tim Jochim is a partner in the Columbus, Ohio office of Walter | Haverfield and a national authority on business succession and employee stock ownership plans (ESOPs). Tim can be reached at email@example.com or at 614-246-2152.