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 distributions paid on S corporation ESOP shares be directly rolled over into another qualified plan?

There is no specific law or regulation on this. The law does not allow direct rollovers on dividends paid on ESOP shares in C corporations, but S corporation distributions are not technically dividends, so it is arguable that they can be rolled directly over into other plans.

Link to this FAQ Topic: S Corporation ESOPs