In some firms, the family retains partial ownership alongside the EO to allow for liquidity while still maintaining involvement. Evaluating factors like
EO can be an attractive option for family-owned businesses looking to transition ownership, either fully or partially. ESOP's and EOT's allow family members to still run the company even if it becomes 100% employee-owned, as the board appoints the trustee who oversees but doesn't run operations.
ESOP's provide significant tax advantages for selling owners, allowing them to potentially end up with more proceeds compared to selling to an outside buyer. ESOP's are funded by the company's future tax-deductible profits generated by the employee-owners themselves.
In some firms, the family retains partial ownership alongside the EO to allow for liquidity while still maintaining involvement.
Existing ESOP company examples like Commercial Casework and Stewart's Shops demonstrate the benefits ESOPs can provide to family businesses and employees.
