Employee Stock Ownership Plans

There has been a dramatic growth in the popularity of Employee Stock Ownership Plans (ESOPs) over the last decade. Owners of closely-held design firms can realize many advantages with an ESOP, including:

• Improved Employee Morale
• Tax Deductible Shareholder Buy-Outs
• Estate Tax Planning Opportunities
• Income Tax Deferral Opportunities
• Favorable Financing
• A Market for the Firm's Stock
• Increased Employee Productivity

The valuation the firm's stock is a critical element in a successful ESOP because trustees cannot pay more than fair market value for the firm's stock. An ESOP valuation should be prepared by a qualified, independent appraiser, as required by Federal law, an updated at least annually.