The Sale of Stock in a Closely-Held Business to an "ESOP" (Employee Stock Ownership Plan): A Liquidity Strategy for Business Owners

Production Date: October 28, 2015 Practice Areas: Tax Law, Business, Corporate, & Securities Law, Labor & Employment Law, and Employee Benefits Estimated Length: 5567 minutes


$ 89 Tax Law, Business, Corporate, & Securities Law, Labor & Employment Law, and Employee Benefits In Stock

This seminar provides a basic overview of key practical and strategic aspects of Employee Stock Ownership Plans.  


An ESOP is a qualified, defined contribution employee benefit plan that invests primarily in the stock of a company. ESOPs are “qualified” in that, in return for meeting certain rules designed to protect the interests of plan participants, ESOP sponsors receive substantial tax benefits.  


Business owners can sell all or a portion of their stock in a business that may otherwise be illiquid or have no established market, to an Employee Stock Ownership Plan, in a highly tax-advantaged transaction. ESOPs are permitted to borrow money, from or on the credit of the employer, to purchase stock from the selling shareholder. Depending on structure, an ESOP-owned company can become a nontaxable entity and use money that would have otherwise been paid to taxes, to amortize the debt used to finance the transaction.


In addition to providing business owners a means to diversify their assets and gain liquidity, an ESOP is also an employee benefit plan that allows a business owner to attract and retain key personnel.


Stan Bulua of Robinson Brog and Stephen Berman of CSG Partners explain the overall legal structure of a leveraged ESOP transaction and discuss valuation and financing aspects of an such transactions. Attendees gain the following skills and benefits from attending this program:


Learning Objectives:

I.    Know how to use ESOPs as a business succession strategy

II.   Understand how to integrate an ESOP transaction with estate planning techniques

III.  Identify how an ESOP sale can be an alternative to an M&A transaction

IV.  Become updated on financing options in the current business environment

V.   Learn the fiduciary rules under ERISA applicable to ESOP transactions

VI.  Summarize the special tax rules applicable to ESOP transactions

Evan S.
Great Neck, NY

Very useful and timely info.

Thomas R.
Chicago, IL

Great program

Kathleen M.
Palm Beach Shores, FL

excellent - innovative ideas and practice

Benjamin L.
Fort Lauderdale, FL

Best, most informative of the classes I've taken so far.

Eugene A C.
Herndon, VA

Fine presentation accompanied by high quality, additionally detailed reading notes.

Cynthia W.
Austin, TX

Extremely informative and easy to follow with what can be a complex issue.

Charles S.
Rochester, NH

Did not know what to expect. These guys are good. In house at a company that is not exactly "closely held" at this point, but the topic was fascinating. I know who to recommend if I ever encounter entities in this space exploring these kinds of options.

Peter G.
Phoenix, AZ

Very interesting topic, but warrants more time to cover.

John D.
Edina, MN

The presenters were excellent in explaining the subject matter of the presentation...

Jo Anna S.
Chicago, IL

Loved it!

Eve L.
Danville, IL

Excellent presentation!

Mark U.
Aspen, CO

Very technical and helpful.

Robert S.
Winter Haven, FL

Complex matter. This is a preliminary introduction. Well done.

Lawrence L.
Houston, TX

nice work good speakers

Jill S.


Loren G.
Hemet, CA

Great prime on this topic!!!!

Brian F.
Oakland, CA

Another surprisingly good program at Lawline

Drake B.
Birmingham, AL

Good job.

William K.
Lewiston, NY

Good course for lawyers who help small enterprises raise capital

Ben F.
Stockbridge, GA

One of the best CLEs on this site.

Marc A.
New York, NY

Speakers certainly expert on subject-- good introduction to an extremely complex area-- more time would be helpful

Edward D.
East Hanover, NJ

Great lecture--eye-opening

Chukwuka O.
Houston, TX

Great Instructors!

Joseph K.
Boston, MA

Of the many Lawline course I have taken over the years, this was one of the best (assuming you have an interest in the sale-to-ESOP subject matter). The two presenters had a very effective tag team approach and conveyed substantive information clearly an

Kristina B.
Grantham, NH

While the subject is very complex, the speakers were both extremely knowledgeable. I would recommend this course to anyone with a client who has an ESOP or is contemplating one.

Kelly B.
Arlington, VA

The seminar may have been "basic" for ERISA lawyers, but it was anything but that for generalists. Admittedly a complex area.

Stuart P.
Fairfax, LB

good course

Frank B.
Ashburn, VA

It probably could have been a two-hour course. Very informative.

George K.
Alexandria, VA

a lot of information