An ESOP is an excellent way for owners to effect a smooth and profitable exit from their businesses, raise cash, and achieve substantial tax savings. Or - with our consulting services - owners can develop strategies toward those ends.

In an effort to paint a clearer picture regarding the breadth of our services, following are several recent examples of ways our clients have benefited from our innovative services that are the result of 55+ years of business ownership.

The scenarios follow:

Substantial Tax Savings and Cash Payout

The CEO of a $50 million a year California contracting business, which was founded in 1926, wanted to find a way for his father (the founder) to cash in and retire. Not only did we determine that the business was worth nearly double the $11 million their financial advisor had indicated, we were also able to provide a method for the founder to realize full market value for his 47% interest in the company. In addition, all of the other family members who owned minority shares in the company were able to take advantage of the new plan, as well, and are receiving cash for their shares at full market value. This can be structured so that all shareholders are rewarded substantially and the sale/transfer is accomplished with absolutely no capital gains tax owed.

A Win/Win for Seller and Buyer

The founder of a Bay Area manufacturing company with $4 million in annual sales asked us to help him sell his business. While we could certainly help the founder find a buyer, we instead showed him a way to sell a portion of his corporate shares for full market value, receive the funds in cash, and pay absolutely no capital gains tax. With our approach, rather than having to hassle with prospective buyers about a fair price for the business, the founder groomed his general manager to succeed him and is enjoying his retirement. The founder has since sold the balance of his shares in the growing company at an appreciated market value and all was tax free.

Benefiting While Remaining in the Business

A business owner in a small Louisiana town north of New Orleans had built his business to the point where it was worth $55 million in market value. Still a relatively young man in his early 50s, the owner determined he wanted to reap some of the benefits of his 20 years of effort in growing his business. We arranged for him to take $16,500,000 out of the business on a completely tax-free basis and to continue to maintain full control over his company. In a few years, as the market value of his business continues to grow, he will be able to withdraw more tax-free millions to spend and enjoy as he wishes.

One additional aspect of all of these scenarios is that all of the funds the individuals received were fully tax deductible to their corporations.

Although you may be thinking all of this sounds too good to be true, these are just a few examples of how we have helped business owners across the nation. If you are interested in developing a similar strategy at your company, please contact us for a no-charge consultation.

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