Most employee-owned companies are established under an Employee Stock Ownership Plan (ESOP). ESOPs are a special type of tax-qualified benefit plan designed to invest in the stock of the sponsoring employer. Employees become beneficial owners of company stock when the employer establishes an ESOP.

Employee Ownership Can Make Companies Stronger 
No one is more concerned about a company than its owners. When employees become part owners through an ESOP, the company may benefit through increased productivity, profitability, and improved labor management relations. This is especially true when the ESOP is combined with substantial opportunities for employee involvement in shop-floor problem solving and participation in decision making.

ESOPs provide attractive tax benefits, which can be used for a variety of corporate purposes:

• Providing a market for retiring business owners
• Raising low-cost capital
• Financing a corporate divestiture
• Providing a low-cost employee benefit plan
• Providing an alternative to business or plant closing

Eligibility 
Businesses with 25 or more employees and a payroll of $500,000 or more are the most likely candidates for an Employee Stock Ownership Plan. However, smaller firms may also be appropriate for employee ownership.

Services 
Services are available to any company, individual, or organization interested in employee ownership. Services include:

• General consultation and information on employee ownership program options, including ESOPs and financing
• Referral to qualified specialists who can assist companies in designing and implementing an ESOP
• Identification of financing options and sources for employee ownership projects
• Referral to other technical assistance and training programs available through the Michigan Department of Career Development and other resources

      For more information, contact: