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.

NCEO employee ownership FAQ hero (keyboard)

How can we assess how much the repurchase obligation will be?

A repurchase obligation study assesses this issue. It should be done by professionals or with their advice, and should be updated periodically. For new ESOPs, the first study should normally occur after three to five years. Most companies can update their study annually, but will want an outside analysis every three to five years.

For more details, see The ESOP Repurchase Obligation Handbook.

Link to this FAQ Topic: Distributions & Repurchase