Who uses ESOPs?

ESOPs are most often used by closely-held companies to buy part or all of the shares of company stock from existing shareholders. In essence, the ESOP provides business owners a tax-deductible market in which they can sell their stock.

Also, the types of businesses that use ESOPs are quite diverse:

• They can be private companies.
• They can be small and mid-market public companies. They can be in any industry, from manufacturing and distribution companies, to providers of professional services.
• They can be individual or family-owned businesses.

This list is by no means exhaustive. Even if your company does not fit in the categories above, you may be able to implement an ESOP.