Owners of privately held organizations, including those that have an ESOP, face many challenges:
  • Aligning employees’ goals with those of the company and its shareholders
  • Selecting a business exit strategy 
  • Financing growth using a tax favored strategy
  • Compliance with tax code and ERISA requirements applicable to ESOPs and other retirement plans
  • Mature ESOP company special challenges such as have and have nots or repurchase values 
  • ESOP repurchase liability and 409(p) compliance
Polsinelli assists businesses regarding the benefits and challenges of ESOP sponsorship.  With our broad base of ESOP guidance experience, whether you are considering sponsoring an ESOP, looking to create a market for shares of your privately-held company, or are considering acquiring an ESOP-owned company, Polsinelli can provide guidance through the ESOP process with services, including:
  • Conducting exploratory studies on whether an ESOP is right for your organization, including considerations of your employee population, your tax goals, and shareholder exit strategy
  • Suggesting alternative plans that offer employee ownership and incentivize company performance if an ESOP is not right for you
  • Drafting ESOP plan document, and transaction documents, including stock purchase agreements, loan agreements, and any other document required for ESOP transactions
  • Whether your company is the target or the acquirer, advising on corporate transaction structures and issues involving ESOP-owned companies
  • Reviewing lending and purchase agreements pertaining to ESOP transactions
  • Counseling benefits committees and plan sponsors on fiduciary duties and ERISA requirements
  • Review of and advice regarding 409(p) tests for S-corporation ESOPs
  • Maintenance of plan documents, required plan amendments and employee communications
  • Assistance with IRS or DOL plan audits
  • Assistance with RFPs and negotiation with ESOP service providers, including plan trustees, third-party administrators, and record keepers