WHAT IS EMPLOYEE STOCK OWNERSHIP PLAN (ESOP) ?
An Employee Stock Ownership Plan (ESOP) refers to an employee benefit plan that gives the employees an ownership stake in the company. The employer allocates a certain percentage of the company’s stock shares to each eligible employee at no upfront cost. The distribution of shares may be based on the employee’s pay scale, terms of service, or some other basis of allocation.
WHY CHOOSE US..?
When a company wants to create an Employee Stock Ownership Plan, it must create a trust in which to contribute either new shares of the company’s stock or cash to buy existing stock. These contributions to the trust are tax-deductible up to certain limits. The shares are then allocated to all individual employee accounts. The most common allocation formula is in proportion to compensation, years of service, or both. New employees usually join the plan and start receiving allocations after they’ve completed at least one year of service.
Benefits Of (ESOP)
- Tax benefits for employees
- Higher employee engagement
- Positive outcomes for the company