You probably already know that ESOP stands for Employee Stock Ownership Plan.
But what does ESOP mean? Well, an ESOP is a qualified retirement plan that offers distinctive cash and tax advantages to business owners and companies. ESOPs are designed to share those advantages with employees and the communities where they live and work, too.
The many advantages of an ESOP require an in-depth understanding of, and scrupulous compliance with, regulatory requirements under both the Internal Revenue Service (IRS) and the Department of Labor (DoL).
That means, when you transition your company to an ESOP, you’ll need to commit to understanding many new terms, concepts, and requirements.