ESOP Blog

What does the term “due diligence” mean? Due diligence essentially is the process of investigating if there are any potential problems that could make a transaction problematic. Generally, the buying party (such as the ESOP trustee) requires due diligence work to uncover potential problems in the company whose stock is being bought. Examples of difficulties…

How long does it take to set up a leveraged ESOP? Typically, the set-up process taxes anywhere from six to nine months. We have heard of plans being set up in several weeks; some take as long as two years. Several steps are necessary to set up a plan. First, a valuation is needed for…

The cost of setting up an ESOP varies considerably, and costs can range from $60,000 to hundreds of thousands of dollars (in 2015). There are several issues to consider: Attorney fees: The basic design of the plan itself – filing initial forms with the government, negotiating with lenders, performing due diligence, drawing up trust documents,…

Just about every ESOP company wants to have employees who think and act like the employee-owners. Compelling research and decades of experience show that employee ownership is in fact a powerful tool to improve corporate performance – but only when companies have “ownership cultures” in which employees think and act like owners. There is a…