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Can an employee company buyout benefit your business?

When you are strategizing about your company's future, there are many directions you could choose to go. Selecting a process that will provide opportunities for growth and enable your company to reach a broader audience is heavily reliant on your ability to analyze the market and your competitors to understand how you can differentiate your product or service. A rather unique way of growing your company is the consideration of an employee buyout where you will give your workers access to investment shares of the business in Ohio. While this decision requires a lot of forethought and careful planning, it can reap some highly advantageous rewards if you are committed. 

At first thought, you may be hesitant to entertain the thought of a buyout because it means you will lose some control over shares of your company. However, the benefits that result from this decision could put you in an even more competitive position. According to Chron, some of the rewards you may experience include the following:

  • An employee stock ownership plan or ESOP, means your company will not be required to pay taxes if you select an S-corporation as your tax structure.
  • Employees may be considerably more motivated considering the success of their company and the wealth of their stock is dependent on their work ethic. 
  • Due to financial savings in areas such as taxes, your company may be able to pay off debt at a much faster rate and utilize savings to develop new products.

The information in this article is intended for educational purposes only and should not be taken as legal advice. 

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