GROWTH. TRANSFER. LEGACY.
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I often find Employee Stock Ownership Plans (ESOPs) are an underutilized strategy when it comes to transitioning a business. When they make sense, ESOPs are a powerful solution for all parties involved: selling shareholders, employees, and even the business itself.
Last week a client closed on the sale of his construction business via an ESOP. In the process he has deferred - and possibly avoid - any capital gains tax.
In addition, eligible employees will now become beneficial owners and share in the company's future success through an additional retirement account. The ESOP plan for employees is similar to a 401(K), the big difference being their balance is predominantly shares of their company, not a diversified basket of securities. Other benefits, such as tax-deferred growth remain in tact.
This transaction was possible through collaboration with the client's advisory team: accountants, business attorney, commercial lender, and of course a wealth management team at UBS with industry-leading expertise in ESOP transactions.
For more information on how this strategy may work for your clients, please contact me at email@example.com or 860-275-8006.
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