An Employee Stock Ownership Plan (ESOP) offers compelling benefits to selling owners, companies, employees and communities. ESOPs can create a market to create liquidity. They can address business succession. They can stimulate employee productivity and morale. They can keep jobs local. And they can do all of that with significant tax benefits—making an ESOP an appealing choice for many companies and their owners. Even so, an ESOP isn’t the best solution for every organization.
In partnership with our sister consulting firm of SES Advisors, SG&F excels at helping business owners assess the feasibility of an ESOP for their unique situation. Leveraging our cross-disciplinary expertise—and our decades of experience in ownership transition solutions—we can help you to determine if an ESOP is a viable option for your company.
Once you have identified an ESOP as a potential ownership succession and liquidity path, SG&F is your one-stop firm in providing all your ESOP legal services, including:
Transaction Structure & Implementation
ESOP transactions require planning. SG&F collaborates with the transaction analysis technicians at our sister consulting firm, SES Advisors, to help you consider all key alternatives in designing your ESOP transaction, ensuring the final structure will meet company and shareholder goals. We review and advise our clients on the differences between minority and majority/100% ESOP transaction structures, bank... Read More
SG&F has handled the design and installation of hundreds of ESOPs, so clearly the focus of our practice is starting up rather than shutting down ESOPs. Nevertheless, there are times when we are called on to assist in the termination of an ESOP. Sometimes it make sense to shut down an ESOP for various reasons, such... Read More
Mergers & Acquisitions
ESOP owned companies have unique advantages when considering a merger or acquisition. By understanding these advantages, the ESOP owned company may be able to negotiate a transaction that creates a “win-win:” it is more attractive to the other party and more favorable to itself. If the ESOP owned company is the buyer, it can offer... Read More
Creation & Operation
Employee Stock Ownership Plans (ESOP) are a type of qualified retirement plan subject to the qualification requirements of the Internal Revenue Code. SG&F has been designing and creating Employee Stock Ownership Plans for over twenty-five years. Through a two-step process, our compliance team works with each of our clients to develop and design plan terms that... Read More
Unlike most closely-held and family-owned businesses, in most ESOP owned companies the shareholders, the board of directors, and the management team are not all the same people. This increases the importance of understanding and working with the rules of corporate governance, both to avoid conflict and potential liability, and to maximize corporate growth and optimize... Read More
The United States Department of Labor (DOL) is responsible for enforcing the fiduciary standards of ERISA and has made ESOP investigations a national priority for the DOL regional offices. The Internal Revenue Service (IRS) is responsible for the technical qualification of ESOPs, and audits plan sponsors on issues such as the deductibility of ESOP contributions... Read More