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title: ESOP Advantages
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[![allegiance_corpo.jpg](https://info.allcapcorp.com/hs-fs/hub/378534/file-571460064.jpg?width=351&height=135&name=file-571460064.jpg "allegiance_corpo.jpg")](http://www.allcapcorp.com)

# What are the advantages of an ESOP?

| ![check_icon.png](https://info.allcapcorp.com/hs-fs/hubfs/check_icon.png?width=45&name=check_icon.png "check_icon.png") | **Flexibility** |   | A transaction can be structured to meet the goals of the sponsoring company, its shareholders and management. |
| --- | --- | --- | --- |
| ![check_icon.png](https://info.allcapcorp.com/hs-fs/hubfs/check_icon.png?width=45&name=check_icon.png "check_icon.png") | **Minimum After-Tax Sales Proceeds** |   | Properly structured, selling shareholders do not pay capital gains tax on sales proceeds. |
| ![check_icon.png](https://info.allcapcorp.com/hs-fs/hubfs/check_icon.png?width=45&name=check_icon.png "check_icon.png") | **Seller Diversification** |   | Existing shareholders can receive an all-cash partial liquidity event to diversify holdings while still participating in future appreciation of the company’s stock. |
| ![check_icon.png](https://info.allcapcorp.com/hs-fs/hubfs/check_icon.png?width=45&name=check_icon.png "check_icon.png") | **Ownership Transition Plan** |   | Establish long-term liquidity strategy that allows the remaining shareholders to elect to defer taxes on capital gains from subsequent transactions. |
| ![check_icon.png](https://info.allcapcorp.com/hs-fs/hubfs/check_icon.png?width=45&name=check_icon.png "check_icon.png") | **Maintenance of Future Upside** |   | In a partial transaction, shareholders can retain a meaningful participation in future increases in equity value. |
| ![check_icon.png](https://info.allcapcorp.com/hs-fs/hubfs/check_icon.png?width=45&name=check_icon.png "check_icon.png") | **Wealth Performance Equation** |   | Employees accrue significant wealth that is in line with company performance, which aligns the interests of management and employees. |
| ![check_icon.png](https://info.allcapcorp.com/hs-fs/hubfs/check_icon.png?width=45&name=check_icon.png "check_icon.png") | **Enhanced Cash Flow** |   | Tax savings due to ESOP contributions improve company cash flow; 100 percent ESOP-owned S corporations have “supercharged” tax savings. |
| ![check_icon.png](https://info.allcapcorp.com/hs-fs/hubfs/check_icon.png?width=45&name=check_icon.png "check_icon.png") | **Continuity of Governance and Management** |   | The ESOP trustee is elected by the Board, and absent fraudulent or negligent activity that it must respond to, does not actively participate in day-to-day management of the business. |

### **Read More: [(ESOPS) - Planning Ownership Succession for Your Business](https://info.allcapcorp.com/esops)**

### [**What is an ESOP?**](https://info.allcapcorp.com/what-is-esop)

### **[Is An ESOP Right For Our Business? A Checklist For “C” And “S” Corporations](https://info.allcapcorp.com/esop_checklist)**

### [**How do my alternative options compare to an ESOP?**](https://info.allcapcorp.com/esops-vs-alternatives)

### [**The Power of an ESOP: Shield Your Legacy**](https://info.allcapcorp.com/shield_legacy_esop)

### **What are the advantages of an ESOP?**

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