The National Center or Employee Ownership (NCEO) published an article on their Web site on the topic of “Using An Employee Stock Ownership Plan (ESOP) For Business Continuity In A Closely Held Company.”
“One of the most difficult problems for owners of closely held businesses is finding a way to turn their equity in a business into cash for retirement or other purposes. The decision to sell is more than an economic one, however. After putting years into a business, an owner develops a strong feeling of identity with the company. At the same time, the owner often has a sense of loyalty to the employees and would like to see them have a continuing role in the company.”
This is an excellent introduction to using an ESOP to transfer ownership of a closely held company to its family members and employees. The Employee Stock Ownership Plan (ESOP) was the first tool designed by binary economist Louis O. Kelso and used to broaden ownership of productive capital among the employees of a corporation.
