Why Not ESOPs for Success Planning?

Rosen, Corey
December 2003
Journal of Financial Planning;Dec2003, Vol. 16 Issue 12, p19
Academic Journal
The article comments on an essay on succession planning that failed to mention the use of employee stock ownership plans (ESOP). ESOPs are one of the most common succession planing tools in small business; because, unlike any other succession plan, the sale to an ESOP can be accomplished entirely in pre-tax corporate dollars, and the seller can defer capital gains tax on the sale by reinvesting in other securities. ESOP rules are similar to 401(k) plans because employee participation in the plan must be followed.


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