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 employees buy stock directly in a closely held company?

Yes, employees can purchase shares directly in a closely held company. This opportunity is normally limited to key employees, but some companies grant the right to purchase shares to employees more broadly. Many of these companies provide incentives to do so, such as low cost loans, reduced prices, or matching free shares. These kinds of plans are most often found in professional firms, such as engineering companies, whose workforce has the disposable income and risk tolerance to make this practical.

For more information, see Direct Employee Ownership.

Link to this FAQ Topic: Direct Employee Ownership