Benefit #6 of selling to an ESOP: It preserves the company's legacy and values in the local community by creating wealth and sustainable employment through employee ownership. ESOPs reward employees by providing them with an ownership stake in the company they work for and help build. It allows the transfer of ownership to employees at no cost and provide employee ownership without the need for employees to have or raise capital. In some cases, an ESOP can be an attractive succession option for family-owned businesses.
Did you know? Employee-owned companies are 235% better at job retention. (NCEO)
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.
Check out this brief animated video to learn more about ESOPs.