ABRC-ESOP

Monday, August 06, 2007

 

Who should consider installing an ESOP?

Evan L. Rhodes: Business Owners who wish to:
-Infuse working capital into the company by reducing tax liability
-Provide capital for family members who have taken over the business
-Acquire another company with pretax dollars
-Induce employees to remain with the company
-Create private market for company stock
-Increase employee productivity and thereby increase company profitability
-Improve the effectiveness and reduce the cost of employee benefits including pension and profit-sharing plans
-Sell or merge the company to employees or select management team
-Sell or merge the company to family members
-Sell or merge the company to outside third party
-Put in place a controlled exit strategy from the company
-Eliminate corporate taxes and increase cash flow
-Cash out one or more shareholders and avoid capital gains tax
-Recover taxes paid in prior years
-Refinance existing debt, making both principal and interest tax deductible

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