ESOP Partners

12/02/2025

For S corporations, the Built-In Gains (BIG) tax can be an expensive surprise.

When a C corporation elects S status, any appreciation earned before the conversion can still be taxed at the corporate level if those assets are sold within five years.

For ESOP-owned companies, that’s especially important—because even though ESOP income is tax-free, the BIG tax applies at the entity level.

The takeaway? Timing matters.

Don’t start your five-year clock until you’ve modeled all the scenarios with your CPA and ESOP advisors.

Read our latest post to understand how the BIG tax works, what triggers it, and how to plan your exit strategy with confidence.

Learn how the IRS built-in gains tax works for S corps, key triggers, strategies to mitigate exposure, and special considerations for ESOP companies.

11/14/2025

Check out the 2026 ESOP and Pension Plan Limits

The IRS has announced the 2026 ESOP and other pension plan limits.

11/11/2025

Thinking about switching your ESOP company from a C corp to an S corp?
An S election can make your company’s ESOP shares “tax-invisible,” meaning income attributed to the ESOP is tax-free. But it’s not a simple decision, or a one-click process.

The closer your company is to 100% ESOP-owned, the more an S corp election can make sense. But timing matters! Premature election could trigger Built-In Gains tax for 5 years or expose your plan to 409(p) issues if synthetic equity isn’t managed carefully.

That’s why we always start with a feasibility analysis, bringing together your trusted advisors and leadership team to determine the most efficient structure for your specific goals.

Learn the step-by-step process, common tax traps, and how to avoid costly mistakes during your conversion:

Learn the step-by-step process of converting a C corp to an S corp, the benefits & pitfalls for ESOP firms, and critical tax traps like Section 409(p) & built-in gains tax.

10/07/2025

The Department of Labor has launched its new Retirement Savings Lost and Found Database, a tool designed to help retirees locate old retirement accounts.

But here’s the catch:

It’s voluntary for plan sponsors
It only covers terminated participants age 65+
It may create new administrative and data liability concerns

For most plan sponsors, the better question isn’t whether to use the database, but how to prevent participants from becoming “lost” in the first place. Clear communication, strong data practices, and force-out provisions can help protect both participants and the plan itself.

Learn more about what this new tool really means—and why proactive plan management is still the best solution.

DOL’s Lost & Found Database is limited in scope & impact. Find out why proactive ESOP plan management is still the best way to avoid missing participants.

09/10/2025

We’ll be speaking, sponsoring, and will have a booth at the Midwest Regional Chapter Conference hosted by the Illinois, Heart of America, Iowa/Nebraska, Minnesota/Dakotas, and Wisconsin Chapters of The ESOP Association.

We look forward to connecting with you!

09/09/2025

It’s not uncommon for employees to leave behind substantial ownership benefits because they don’t realize what they’re walking away from.

In one example, an employee left for a job offering a 1% higher 401(k) match — unaware that their ESOP benefit was equivalent to 14% of their salary.

Don’t let it happen to your team. Explore how HR leaders can clearly communicate the ESOP as a core part of the employee experience—strengthening recruitment, deepening engagement, and improving retention.

Help employees understand the value of your ESOP. Learn how HR can position employee ownership as a standout benefit that drives engagement and retention.

08/12/2025

Making the transition to employee ownership?

Your first year as an ESOP company is crucial for setting the right foundation.

Learn about the immediate changes, compliance requirements, and cultural strategies that successful employee-owned businesses implement to thrive for the long term.

Navigate your first year as an ESOP company with confidence. Learn compliance requirements, cultural strategies, and best practices for long-term success.

07/08/2025

Ever wonder what a company means when it says it’s employee-owned?

We break down the differences between ESOPs, EOTs, and worker cooperatives — and the reasons business owners choose to make ownership available to their employees. Find out how these ownership models differ in terms of wealth-building, employee retention, and tax advantages for the business.

Learn about your options.

What Does Employee-Owned Mean? Compare ESOPs, EOTs & Worker Co-ops: Learn how employee ownership impacts business value, taxes, and workplace culture.

06/03/2025

Your ESOP announcement is about continuity, stability, and trust as much as it’s about change.

When a business becomes employee-owned, it's not just changing how ownership works. It’s changing how employees view their role, their impact, and their future with the company.
And yet, too many companies approach this moment without a thoughtful plan to communicate it.

If you’re transitioning to ESOP ownership, here's an insight worth sitting with:

Your employees will remember how they felt about the announcement more than what you said. Our latest article offers guidance to help leaders:

-Time their announcement for maximum clarity and trust
-Explain what ownership really means
-Keep employees engaged throughout the transition
-Use this milestone as a PR opportunity and culture-building moment

It’s not enough to think about getting the details right. Your announcement is an opportunity to set the tone for your company’s next chapter.

Here’s how to effectively communicate your company’s transition to an employee stock ownership plan (ESOP). Get strategies for timing, messaging, and employee engagement.

05/20/2025

Don’t put your ESOP’s future value at risk by mistaking replacement planning for true succession management.

Replacement planning merely fills vacancies, while strategic succession ensures leadership continuity that protects share price during critical distribution phases.

For more stable successions that help protect against losses to share value, implement these five essential guardrails to guide your planning:
1. Critical-role matrices linked to value drivers
2. Time-to-ready metrics
3. Alignment with repurchase forecasts
4. Regular scenario planning
5. Structured, bias-reducing assessments

These practices don't just satisfy trustee requirements; they create the stable leadership pipeline necessary for sustainable growth through ownership transitions. To get the details, read the article in full.

Protect your ESOP’s future with strategic succession planning that goes beyond replacement strategies. Learn 5 key guardrails to secure leadership continuity and shareholder value.

05/06/2025

Confused about ESOPs and EOTs? You’re not alone. We break down the similarities, differences, and what business owners should consider when choosing an exit strategy.

Compare ESOPs and EOTs to find the right exit strategy for your business, goals, and employee ownership vision. We explore the similarities and differences.

03/25/2025

Employee rehires happen – make sure you have best practices in place! Find out how participation, payouts, and compliance are affected when an employee rejoins your company.

Rehiring an employee? Understand how their ESOP benefits, payouts, and plan participation are impacted and how to apply best practices.