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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How can companies with direct employee ownership plans provide liquidity for employee owners?

The most practical way for companies that allow employees to buy shares to provide liquidity is for the company to repurchase the shares. The company might have periodic offering periods to purchase the shares. These purchased shares can then be made available for other employees to buy. By having the company repurchase the shares, the company can avoid what could be difficult securities law issues if it tries to facilitate an internal market for employees to buy and sell shares to and from one another.

Link to this FAQ Topic: Direct Employee Ownership