ESOP Companies and the Paycheck Protection Program: Survey Results

We surveyed ESOP companies starting on April 10 in order to gather data on how they are faring so far in the application process. As of this writing, we have received 164 responses from companies with ESOPs. Of these, 115 or 70% have already submitted a PPP loan application, and most of the rest are actively working with a lender.
Member-Only Content. Login or Join to View.

ESOP Tax Incentives and Contribution Limits

Congress has enacted tax incentives for employee stock ownership plans (ESOPs) that provide advantages for not only the sponsoring company but also the employees, the lender to an ESOP, and selling shareholders in closely held companies.

ESOPs and Preferred-Status Certification

Challenges and Opportunities for Employee Stock Ownership Plans and Business Preference ProgramsPart 1: Goals and features of preferred-status certifications Updated August 2, 2017

Exemption from Securities Registration Under Rule 701

Under Rule 701 of the Securities Act of 1933, companies can offer their own securities as part of written compensation agreements to employees, directors, general partners, trustees, officers, or certain consultants without having to comply with federal securities registration requirements.

Federal Legislation on ESOPs

Congress has been very supportive of ESOPs since their creation in 1974. There have been multiple added tax incentives, although some were later repealed.