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Share The Wealth

Give employees a share in your company--and enjoy tax savings for yourself.

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This story appears in the February 1997 issue of Entrepreneur. Subscribe »

If you are one of the lucky small-business owners whose company has grown over the years, you may be looking for a tax-sensible way to glean equity from your efforts and diversify your holdings. You may also want a tax-favored way to pass along the company to heirs or others involved in your business.

An Employee Stock Ownership Plan, or ESOP, may be the answer. An ESOP is a tax-qualified, defined-contribution employee benefit plan that invests primarily in the stock of a company on behalf of its employees, who thereby gain an ownership interest in the firm.

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