At its core, an Employee Stock Ownership Plan (ESOP) is a qualified retirement plan. However, the practical use of this strategy is to provide an ownership transition and retirement plan for owners of privately owned businesses. An owner can sell part or all of his/her shares to the ESOP at fair market value. ESOPs stand out from other benefit plans because they allow the company to borrow money from an outside source, such as a bank, to purchase the company shares from the owners.  As such, they are a unique combination of a benefit plan and a tool of corporate finance. 

Learn more about the ins and out of ESOPs in this whitepaper.