${site.data.firmName}${SEMFirmNameAlt}
Throughout Southern California
310-324-9403
Toll-Free
866-402-1805
View Our Practice Areas

Win-Win: Selling Your Company Stock To Employees

For [some business owners], let's call them the "able but not quite ready to retire" business owners, the thought of handing off the business they built and walking away is an unsettling, if not gut-wrenching, decision. For these business owners that have also established their business as a corporation (not an option for partnerships), an Employee Stock Ownership Plan (or ESOP) may provide a better retirement option.

Selling your business when it comes time (or nearly time) to retire is a bittersweet moment for a number of reasons. The bitter can come in entirely different ways. For example, selling the business can either mean saying goodbye to it forever or, what may be worse, selling yourself as an "employee" to the company you no longer own for those last years leading up to retirement.

Alternatively, an ESOP may be an interesting option to consider to sweeten up that bittersweet decision. Curious? Take a look at a recent article in Forbes titled "How ESOPs Let Employees Take Stock In Your Retirement."

The first question for the uninitiated (quite forgivably) is what is an ESOP? An ESOP, or "Employee Stock Option Plan," is technically a retirement plan. However, unlike most retirement plans an ESOP effectively works to balance the retirement of the owner and the employees by balancing ownership and control.

Here is how it works: The owner essentially sells the stock of the corporation to the employees, but retains much of the corporate structure to control and run the business. In the meantime, the stock itself becomes the retirement plan for the employees who are now working to build the business that is their retirement.

Now, clearly there are some important moving pieces to consider regarding whether your business is suitable for an ESOP. When an ESOP is right, it can be a hole-in-one for all concerned. Take a look at the original article for a review of some of those "moving parts" that can make an ESOP right for a business, or a business right for an ESOP.

If an ESOP sounds like a good fit for you and your business, then be sure to get competent counsel. This is not a do-it-yourself project.

No Comments

Leave a comment
Comment Information
Email Us For A Response

Find Out The Difference That Experience And Expertise Makes

Get the peace of mind that you deserve. First, attend a seminar. This will entitle you to a free initial consultation and a discounted estate planning fee. To learn more about our services or sign up for a seminar, contact us online or call us at 866-402-1805. We have offices in Torrance, Orange, Newport Beach, Pasadena and Woodland Hills.

Questions? Contact Us.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Call Now For A Free Consultation: 866-402-1805
  • ${site.data.firmName}${SEMFirmNameAlt}
  • Main Office: Torrance

    Torrance Office
    990 West 190th Street
    Suite 500
    Torrance, CA 90502

    Toll Free: 866-402-1805
    Map & Directions

    Orange Office
    333 City Boulevard Street
    17th Floor
    Orange, CA 92660

    Toll Free: 866-402-1805
    Map & Directions

    Newport Beach Office
    5000 Birch Street
    Suite 8000
    Newport Beach, CA 92660

    Toll Free: 866-402-1805
    Map & Directions

    Pasadena Office
    790 East Colorado Boulevard
    9th Floor
    Pasadena, CA 91101

    Toll Free: 866-402-1805
    Map & Directions

    Woodland Hills Office
    5850 Canoga Avenue
    4th Floor
    Woodland Hills, CA 91367

    Toll Free: 866-402-1805
    Map & Directions

    Office map