The benefits of employee ownership can extend beyond the financial advantages for owners and workers. The focus of ESOPs for business owners is often limited to the financial value, namely providing a ready buyer for the company at fair market value and the tax benefits of selling to an ESOP....
In a recent Fourth Circuit case, an ESOP trustee was found to have caused the trust to overpay for corporate stock by almost $30 million. The court found that the trustee failed to comply with their fiduciary duty to act in the best interests of the ESOP participants. This case can be used as a...
Employee-ownership and benefit corporations are becoming increasingly popular corporate structures that offer unique benefits to multiple stakeholders. In contrast to a standard corporation that primarily benefits shareholders, a benefit corporation balances profit and social purpose. Combining...
A new study from the Rutgers Institute for the Study of Employee Ownership and Profit Sharing has found that Employee Stock Ownership Plans (ESOPs) can reduce wealth inequality for low and moderate income families. The study found that employees, through education and investment, can increase...
Brewery culture seems made for Employee Stock Ownership Plans (ESOPs). Breweries seek collaborators and innovators, and typically people want to work there long term and be part of the creation team for new brews. Without an ESOP, retirement can be difficult for workers, and could even close the brewery or change its structure altogether, depending on how the owners plan to retire. As many craft breweries are in the stages of their youth, their owners and founders may not yet have thought of a succession plan for their business, or developed contingencies to be employed in the event of a financial downturn.
After years of building up a business, the day comes when the owner is looking towards retirement and has to decide what to do with their company. Options for a retiring small business owner in California include closing the business, passing it on to family members, and selling the company. ...
It's National Small Business Week! At Butterfield Schechter LLP, we provide our clients with all forms of business counseling and business planning. From business formation to employee benefit plans, our attorneys will help your business stay up to date with the latest regulatory changes while ta...
It's National Small Business Week! The U.S. Small Business Administration (SBA) spotlights our nation's 30 million small businesses. Register for the FREE National Small Business Week Virtual Conference hosted online by the SBA on May 7-8 from 8:00 a.m. to 2:30 p.m. PT. You will hear from industr...
Supermarkets and grocery stores are especially well-positioned for employee ownership. Three of the top 5 largest employee-owned companies are grocery stores. Employee stock ownership plans (ESOPs) can benefit privately-owned grocery stores in California, providing incentives for founders, owne...
An article in the Harvard Business Review evaluating the performance of employee stock ownership plans (ESOPs) found that ESOP-owned companies generally have faster growth than non-employee owned companies, in part due to the added value of employee participation, having a stake in the compan...
Senate Bill (SB-553) would provide an incentive for some California businesses to adopt employee stock ownership plans, better known as ESOPs.
National Employee Benefits Day is celebrated each year on April 2.
Senators introduced a bipartisan bill that would encourage employee stock ownership as a means of retirement savings for workers. U.S. Senators Pat Roberts (R-Kan.) and Ben Cardin (D-Md.) introduced Senate Bill 177 which would, in part, expand the creation of S Corporation ESOPs. Introduced o...
Family-owned companies often take pride in the reputation they have built up over the years. However, at some point, the owners may need to step down from the company. The founders may want the next generation to follow in the family business but the majority of family-owned companies only la...
On September 11, 2018, Governor Jerry Brown signed a new mediation bill into law that is intended to inform clients about confidentiality in the mediation process. The new law, which went into effect on January 1, 2019, requires lawyers to provide specific disclosures in writing and have the ...
The Employee Benefits Security Administration (EBSA) enforces ERISA laws and regulations, including conducting civil and criminal investigations. EBSA enforcement of ERISA laws often results in recovering money from enforcement actions, voluntary fiduciary correction programs, abandoned plan ...
In recent years, there has been an increase in considering environmental, social, and governance (ESG) criteria when it comes to investing. However, not all investors agree that ESG factors should be considered when identifying prudent investments. The Department of Labor (DOL) recently put o...
The current Secretary of Labor, R. Alexander Acosta, issued a message laying out the DOL's Strategic Plan for Fiscal Years 2018-2022. As part of the strategic plan, an objective of the Employee Benefits Security Administration (EBSA) will be to “improve the security of retirement, health, and oth...
Employee-ownership can benefit company owners and employees. A recent initiative is also exploring employee share ownership as an investment strategy in low-income communities. This includes discussing how employee-ownership could contribute to increased investment in designated Opportunity Z...
A recent survey shows Employee Stock Ownership Plans (ESOPs) offer higher retirement savings than other retirement plans. The survey, released by the National Center for Employee Ownership (NCEO) shows ESOP participants have more than twice as much in their retirement accounts compared to non...
Claims for an ERISA breach of fiduciary duty must be filed within six years, or within three years if the plaintiff has actual knowledge of the breach or violation. In a recent 9th Circuit Court of Appeals decision, the court found that access to the documents disclosing the breach does not c...
The IRS has proposed new regulations on hardship distributions for participants who need to take money from their retirement savings. The new regulations will generally provide greater leeway for participants who want access to more of their retirement savings. These changes will go into effe...
Most retirement plans provided by employers have a tax-favored status to provide tax savings to both employers and beneficiaries. However, when a retirement plan does not continue to meet the necessary requirements, the plan can lose tax-favored status and end up costing plan providers. Employer...
Contributing Author: Kristine M. Custodio, ACP, Senior Paralegal On November 1, 2018, the Internal Revenue Service announced cost-of-living adjustments which will be affecting dollar limitations for qualified pension plans for the 2019 tax year. Section 415 of the Internal Revenue Code provides ...
The costs of going to college have continued to rise over the past decade. One way to help alleviate the high costs of education is to take advantage of tax-advantaged savings plans. One such plan is called a Section 529 education savings plan. An education savings plan allows individuals to op...