Number Nine - Benefit of Selling your Company to an ESOP

Posted by Aaron Juckett, CPA, CPC, QPA, QKA on Fri, Jun 04, 2021
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Benefit #9 of selling to an ESOP: It creates the liquidity event now. This enables shareholders to diversify and begin to access value prior to retirement. The ESOP cannot pay a synergistic premium. This enables shareholders to diversify and begin to access value prior to retirement. Selling to an ESOP is always a stock sale which is more favorable from a tax standpoint than a traditional asset sale. 

Additional key tax benefit;  The portion of a company owned by an S Corporation ESOP is not subject to. federal or state income taxation, increasing cash flow and providing the company with a competitive advantage. This means that S Corporations that are 100% ESOP-owned are not subject to any federal or state income taxes, increasing cash flow and providing the company with a competitive advantage. 

Is An ESOP Right For Your Company

Check out this brief animated video to learn more about ESOPs. 

Topics: ESOP, Tax Savings

Aaron Juckett, CPA, CPC, QPA, QKA
Written by Aaron Juckett, CPA, CPC, QPA, QKA

Aaron is President and Founder of ESOP Partners and provides implementation, administration, and consulting services to hundreds of companies. He is a member of The ESOP Association (TEA) and the National Center for Employee Ownership (NCEO).

Keep Your ESOP On Track and On Time
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