Frequently Asked Questions

Employee Ownership FAQs

Common questions about employee stock ownership plans (ESOPs), employee ownership trusts (EOTs), and other forms of employee ownership, from the basics to technical topics.

This FAQ is written primarily for business owners, managers, and advisors involved in setting up or running an employee ownership plan. If you're an employee at an ESOP company looking to understand your own benefits and rights, see our articles on Working at an ESOP Company and The Rights of ESOP Participants.

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Can an employee ownership trust company be sold?

Employee ownership trusts generally are designed to be permanent owners, something that is written into the trust documents. But there are circumstances, such as where a sale may be needed to keep the company open, that the trust protector may decide to override the purposes of the trust. If the goal is to discourage sales because an attractive buyer comes along, the company can require that proceeds of the sale go to charity. The company could also create rules that distribute the value to current and/or former employees.

For more details, see Using an Employee Ownership Trust for Business Transition.

Link to this FAQ Topic: Employee Ownership Trusts (EOTs)