ESOP
Employee Stock Ownership Plan
Why convert to an ESOP?
No risk of losing customers due to selling your company.
The company is not being marketed for sale; it is a private conversion.
No risk on losing key employees/personnel.
Loyal employees do not have to worry about losing their job or rank due to new ownership/administration. It is a bonus and opportunity to reward them.
No price haggling, it is a conversion to an ESOP.
The purchase price is based on multiple of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) subject to a confirmation of a business evaluation firm and the bank. No need for employee approval or acceptance.
ESOP is tax-exempt, federal and state.
If the company earns a million dollars, they keep a million dollars without payment of taxes regarding capital gains for both federal and state. Now and hereafter, the ESOP shares the profit with the employees (pro rata share).
An ESOP company pays no federal or state income taxes.
