An Employee Stock Ownership Plan (ESOP) is a defined contribution plan that is operated through a plan trust and governed by the Employee Retirement Income Security Act (ERISA).
ESOPs offer business owners a tax advantaged succession planning vehicle, that provides flexible options for selling a portion or all of a business while preserving the legacy of the company, its employees and exiting owners. Founders and main shareholders can sell back all of their shares at once, or percentages of their shares over time to the ESOP. This facilitates more control over exit payouts and the transition of leadership consistent with the owner’s wishes.
ESOPs are most commonly implemented to:
Aprio’s ESOP valuation specialists have the technical expertise to provide valuation assistance with the formation of new ESOPs, as well as the preparation of annual valuations for regulatory compliance purposes to meet the Department of Labor’s reporting requirement.
Aprio can also provide business owners integrated wealth management to coordinate financial, tax, estate and investment planning to reduce tax liabilities, mitigate risks and maximize opportunities.
Aprio offers comprehensive transaction advisory services for businesses that maintain existing ESOP plans or for those considering this model. Our ESOP services include:
As a buyer, we identify hidden debt liability, opportunities for tax efficiencies and quantify potential tax risks, ensuring that tax exposures are considered in transaction documents. As a seller, we work to identify and remedy tax risks to safeguard the value of your business and your ESOP plan.
ESOPs pose complex tax and accounting challenges for organizations. Aprio can help you simplify these tax and accounting requirements and provide you the confidence of knowing that your ESOP accounting is accurate, and you are meeting all scheduled filing and regulatory requirements.
Our assurance advisors adhere to the highest professional standards and provide a full range of specialized audit and financial reporting expertise to support the needs of ESOP clients.