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You're a business owner, you're a long-term planner and you'd like to have a succession plan that benefits you and the people who've helped you build the business.
If that's the case, then the you'd probably like to:
- Have your business continue beyond your own career.
- Sell your stock to the company's employees in a tax-free exchange.
- Balance compensation to your employees between salaries, profit-sharing and company stock, with the stock being tax-deffered for the buyer and the seller
- Have the employees act like owners instead of employees and drive the value of the business even higher.
An ESOP can help you achieve these goals. Many books and articles are available on this subject. So I'll keep this article short and simply hope that it stirred your interest in starting an ESOP to the extent that you'll research it further.
Related sidebar: 80% of America's workforce are employed by businesses with less than 100 employees. The future of our social security system is suspect. Wouldn't it be great if more citizens actually owned part of the business they work for? Think of the advantages for everyone involved
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Comments (2)
Joe,
I'm interested in the concept...Who do you contact to begin? An attorney, an accountant, or are there consultants who can help set one up? Thanks.
Posted by Michael Taylor | March 13, 2008 1:34 PM
Posted on March 13, 2008 13:34
I'd suggest asking your accountant or attorney for a recommendation -- because they'll need to be in the loop at some point, and you'll need an attorney who's current on ESOP policies. You might start with a conversation with Menke & Associates in San Francisco -- they've done hundreds of ESOPS. Another specialist i could recommend is Roland Thon in Kansas City.
Posted by joe phelps | March 17, 2008 3:55 PM
Posted on March 17, 2008 15:55