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Implement an ESOP

From Start to Finish 

You have made the strategic decision to form an ESOP. Our team of experienced professionals can integrate the legal, finance, investment banking, tax, and ERISA knowledge essential to the plan. 

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How to Implement an ESOP

Similar to preparing a strategic growth plan, important information must be obtained for review and analysis when assessing an ESOP for your company. A preliminary assessment of this data can help you clarify your financial objectives.

 

Do not lose control because of a lack of planning.

At a minimum, this data should include:

  • Succession plan preferences and the goals

  • Historical and projected financial results of the business

  • Management structure, including the experience and expertise of the C-level executives responsible for specific areas within the company

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Sell-Side Advisory

Once the business and its owners determine the appropriate structure, the ESOP implementation stage begins. We assist in choosing advisors, negotiating key terms and conditions, and documenting the ESOP transaction in compliance with Internal Revenue Services (IRS) and Department of Labor (DOL) regulatory requirements. If applicable, we can assist you in raising debt to fund the transaction. 

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Determine if an ESOP is Right for Your Business 

What does employee-owned mean to you? When preparing for the future of a business, understanding all options is vital. An ESOP is one solution, but the preliminary assessment may determine that it is not the best solution to help you achieve your goals. We help companies define their goals and examine a broad range of strategic options.

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Maintaining Your ESOP

Our team offers ongoing ESOP accounting and tax advice necessary for ESOP implementation and a wide range of business-oriented, value-added services. Additionally, we have long-standing relationships with third-party affiliates who can provide legal services to assist the business in maintaining the tax-qualified status of the ESOP. 

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Effective ESOP Planning

If an ESOP is the best strategic choice, we will help you explore the appropriate size, structure, and financing terms to ensure the feasibility of a successful transaction. This analysis will model how the ESOP will impact the business, the selling owners, and the employees and may include the following:

  • An initial valuation of the business to establish the amount an ESOP may pay

  • An analysis of stockholders’ equity to evaluate the effects of the ESOP on existing shareholders and the financial performance of the business

  • A plan analysis to decide the optimal structure of the transaction 

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Ready to Take the Next Step

If you are not already part of an employee-ownership culture and want to know if an ESOP would work for your company, now is the time to start the ESOP Feasibility Process. It goes beyond surface-level, subjective factors and provides facts and data that will help you decide on selling your business. In other words, it gives you and other stakeholders the information you need to know if an ESOP is right for your business. Even if you decide that an ESOP is not your best choice, the feasibility process will provide much of the information necessary to help you evaluate other opportunities. Learn more about how The ESOP Guy can help you. 

"Our leadership team appreciate Berman Hopkin’s advisors as we went through the formation of our ESOP given their solid ESOP knowledge and their customized approach to our specific needs as a company.” 

 Michael Rodriguez
E-Z Bel Construction LLC

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Ready to take the Next Step? We are here to help.