Duffy2010,
I can truly appreciate where you are coming from yet they would be totally crazy to attempt to sell that position on the open market...a sale like this will only generate the desired price point for them by selling the company in its entirety. They will only do this when all their stars are in alignment and they have something in demand and can exit cleanly.
In a word it’s called an exit strategy and I am certain they have one as all companies in their position do.
Bill
Business Owners
95% of the typical business owner's net worth is often tied up in their business. But in order to realize this wealth, you need to sell your business.
When business owners approach retirement age, they need to consider their succession planning alternatives and opportunities to generate shareholder liquidity, one being an ESOP.
As you explore your options, we'll work with you to evaluate whether an ESOP is appropriate for your personal and financial goals. And while ESOPs can be complex, we don’t believe the decision process needs to be.
Our goal is to help you fully comprehend the key aspects of ESOPs and to determine if an ESOP might be appropriate for your company
Benefits of ESOPs
ESOPs offer numerous advantages for each of the parties involved.
For Selling Owners:
• ESOPs can offer a market for their otherwise illiquid stock.
• ESOPs offer tax benefits, including the Section 1042 Rollover.
For the Company:
• ESOPs also offer tax benefits for the company; the ESOP sponsor can deduct its entire ESOP contribution, principal as well as interest, making the ESOP loan essentially tax-deductible.
• ESOPs can also be used as a financing vehicle; a leveraged ESOP can be used to obtain financing for the employer, with a full tax deduction allowed for ESOP contributions used to repay principal as well as interest.
For the Employees:
• The ESOP is a tax-deferred retirement benefit - at no expense to them!
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