Looking for a succession strategy? Consider an ESOP

Description

Abstract: For construction company owners, succession planning can be a challenge. One option is an employee stock ownership plan (ESOP). An ESOP creates an instant market for the company’s stock. And while it involves transferring ownership to employees, it’s distinguishable from a management or employee buyout. Unlike a buyout, an ESOP allows owners to transfer control to the next generation gradually. It also provides the business and its owners with significant tax benefits. This article describes those benefits, along with some ESOP disadvantages. A sidebar explains the pros and cons for S corporations in particular.