--- title: What Is an ESOP? image: https://info.allcapcorp.com/hubfs/blog/acc-feature-8.jpg --- [![Allegiance-logo-transparent-white](https://info.allcapcorp.com/hubfs/Allegiance-logo-transparent-white.png)](http://allcapcorp.com/) - Our Expertise - [Why Allegiance Capital](http://allcapcorp.com/our-expertise/) - [Selling A Business](http://allcapcorp.com/our-expertise/selling-a-business/) - [Buying A Business](http://allcapcorp.com/our-expertise/buying-a-business/) - [Get Financing](http://allcapcorp.com/our-expertise/get-financing/) - Who We Are - [About Us](http://allcapcorp.com/who-we-are/) - [Our Team](http://allcapcorp.com/who-we-are/our-team/) - Our Success - [Client Testimonial](http://allcapcorp.com/our-success/#testimonials) - [Industry List](http://allcapcorp.com/our-success/#industries) - [Completed Transactions](http://allcapcorp.com/industries/) - [Awards & Accolades](http://allcapcorp.com/our-success/#awards) - [Accreditations](http://allcapcorp.com/our-success/#accolades) - [Resources](https://info.allcapcorp.com/resources) - [Articles](https://allcapcorp.com/blog/) - [Contact Us](https://signup.allcapcorp.com/contactus) Toggle navigation Toggle navigation - Our Expertise - [Why Allegiance Capital](http://allcapcorp.com/our-expertise/) - [Selling A Business](http://allcapcorp.com/our-expertise/selling-a-business/) - [Buying A Business](http://allcapcorp.com/our-expertise/buying-a-business/) - [Get Financing](http://allcapcorp.com/our-expertise/get-financing/) - Who We Are - [About Us](http://allcapcorp.com/who-we-are/) - [Our Team](http://allcapcorp.com/who-we-are/our-team/) - Our Success - [Client Testimonial](http://allcapcorp.com/our-success/#testimonials) - [Industry List](http://allcapcorp.com/our-success/#industries) - [Completed Transactions](http://allcapcorp.com/industries/) - [Awards & Accolades](http://allcapcorp.com/our-success/#awards) - [Accreditations](http://allcapcorp.com/our-success/#accolades) - [Resources](https://info.allcapcorp.com/resources) - [Articles](https://allcapcorp.com/blog/) - [Contact Us](https://signup.allcapcorp.com/contactus) Search Box × Search Search # What Is an ESOP? ## **The definition of an ESOP varies depending on perspective:** 1. To an owner of a closely-held company, an ESOP is a way to get money out of his company on a tax-advantaged basis and to transition control of his company to key employees or family (insiders). 2. To the company’s employees, an ESOP is a retirement plan (like a 401k) that allows employees to share in the value of their company. 3. To the Company, an ESOP is a vehicle of corporate finance that offers tax benefits not available anywhere else in the Internal Revenue Code. Companies involved in an ESOP can deduct loan principal payments, deduct dividends paid and operate as a tax-exempt entity. ## **You May Want to Consider an ESOP if…** - You wish to honor and repay employee loyalty - You prefer to maintain the established company culture and your identity as a leader - Your interest is to carry out a liquidity event AND achieve family succession - You would like to “take chips off the table” with a minority shareholder buyout - There is no appropriate market for the company - You insist on maintaining control during and after the transaction process ### **Read More: [(ESOPS) - Planning Ownership Succession for Your Business](https://info.allcapcorp.com/esops)** ### **[What are the advantages of an ESOP?](https://info.allcapcorp.com/esop-advantages)** ### [**How do my alternative options compare to an ESOP?**](https://info.allcapcorp.com/esops-vs-alternatives) ### **[Is An ESOP Right For Our Business? A Checklist For “C” And “S” Corporations](https://info.allcapcorp.com/esop_checklist)** ### [**The Power of an ESOP: Shield Your Legacy**](https://info.allcapcorp.com/shield_legacy_esop) ### **What is an ESOP?** - - - 14180 Dallas Parkway, Suite 350, Dallas, TX 75254 © 2026 Allegiance Capital | Securities offered through ACC Securities, LLC, member FINRA / SIPC. Check the background of your financial professional on FINRA’s BrokerCheck. | 214.217.7750