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)

What if the Department of Labor (DOL) finds a problem with ESOP operations?

Because the DOL is not responsible for taxes, if it finds a problem, it will ask that it be corrected. If the problem is serious enough, however, participants or the DOL could sue, seek injunctive relief, or seek other legal remedies. The DOL can also refer issues to the IRS if they involve tax violations.

Link to this FAQ Topic: Governance, Fiduciaries & Compliance