When structuring an Employee Stock Ownership Plan (ESOP) transaction, financing plays a pivotal role in determining both the feasibility and long-term success of the deal. Among the most common financing tools used are senior debt (typically bank financing), and subordinated (seller) debt. …
Structuring an ESOP: 1042 or Not?
When considering whether to transition your company to an Employee Stock Ownership Plan, one critical decision is whether the selling shareholder(s) should elect to defer (or avoid) capital gains taxes under IRC Section §1042. In our previous article, we outlined the importance of feasibility …
Structuring an ESOP: The Importance of Feasibility Studies in ESOP Planning
When a business owner is considering whether to sell to an Employee Stock Ownership Plan (ESOP), thorough planning should be undertaken to understand the likely outcomes to the selling shareholder (s), the Company, and the soon to be ESOP participants. One of the key steps in the early stages …
Learn more about Structuring an ESOP: The Importance of Feasibility Studies in ESOP Planning
Selling Your Business: Understanding an ESOP
When considering ownership transition options, it's important to understand the various types of buyers and their implications. Among these options, selling to an Employee Stock Ownership Plan (ESOP) presents unique advantages as well as some potential drawbacks. Potentially the most flexible and …
Learn more about Selling Your Business: Understanding an ESOP