An ESOP is an employee stock ownership plan that is essentially a retirement plan which helps employees obtain ownership in the company. But why should you care? Well, ESOPs can be great options if you are a privately-held business owner considering succession planning. You have a few options available to you:
Family Business Succession Planning
If you are a family-owned business, you might have your family already in place to take over the company. In this case, ESOPs are generally not the right fit.
Selling to Outside Party
This can be a great way to go about succession planning. However, what happens to your employees after you have turned over management to the new owners? Will they still have jobs? There are many what-ifs to consider regarding your employees well-being after succession that can cause hesitation with this option.
If you have a group of empowered employees that want to succeed in business, an ESOP might be the right path for you. With an ESOP, the same potential hesitations seen with selling to an outside party are gone, leaving you with the peace of mind needed to enjoy your new lifestyle.
If you think that an ESOP is potentially the best option for your company, check out this article on next steps to consider. Meaden & Moore is fully qualified to represent your organization.
For more information on the importance of an ESOP, watch our video below. Subscribe to our YouTube channel for more videos.