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.

Five Common Myths About Broad-Based Equity Plans

During the 1990s, according to our research here at the National Center for Employee Ownership, the number of employees getting stock options ballooned from less than one million at the start of the decade to about 10 million by the end.

Freezing or Terminating an ESOP

Each year, 3% to 4% of all employee stock ownership plans (ESOPs) are terminated; an unknown percentage are frozen, usually because the sponsor wants to create a different kind of benefit plan, wants to recapture some of the ESOP's ownership or, more rarely, has financial problems.

How Small Is Too Small for an ESOP?

One of the most frequently asked questions the NCEO has received over the last few decades is "Is my company too small to have an ESOP?" There is no simple answer to this, and certainly there are no upper or lower limits per se on the size of a company sponsoring an ESOP.