When owners wish to retire or otherwise sell their business, they are often unsure which resources to turn to. An employee stock ownership plan (ESOP) is both a tool for allowing the owners of companies to share the business equity with employees and a retirement plan for those employees.
Businesses that have successfully implemented ESOPs have seen a number of benefits, including:
- Employees gain an ownership stake in the business, increasing their personal wealth without the risks associated with creating or purchasing their own business.
- Employee job security and personal satisfaction increase.
- ESOP businesses are more productive and more profitable, last longer in the marketplace, and provide greater shareholder returns.
It can be a great thing for the community if the business is sold to the existing employees, through an ESOP, rather than to an out-of-state buyer that may shift jobs and profits out of the community. For these reasons, the State of Iowa has passed two pieces of ESOP-related legislation: ESOP Formation Assistance, and a Capital Gain Deduction for Sale of Stock to an ESOP. Iowa Economic Development Authority's ESOP Information Page
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Email: firstname.lastname@example.org Iowa-Nebraska Chapter of The ESOP Association
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