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Planning an Employee Stock Ownership Plan? Get an Appraisal!

January 20, 2011

An Employee Stock Ownership Plan (ESOP) is a benefit that allows workers to purchase shares in the company that employs them. The company buys those shares back at their full market value when the company and the employee part ways. Companies that offer employees the ESOP benefit have annual valuations performed so they always know the market value of the stock. 

Before implementing an ESOP, it is a good idea for a company to hire an appraiser to determine the company’s value. To do this, an appraiser will take into account the company’s cash flow and profits, as well as the value of the company’s machinery and equipment. If the value determined is higher than expected, the amount the company would have to pay to departing employees may be prohibitively expensive. 

The NEBB Institute endorses and strives to observe the highest standards of professional ethics to preserve the public trust inherent in the professional appraisal practice. The Institute provides initial and monthly comprehensive education, ongoing support, and a dynamic international network, and certifies professionals in the art of machinery/equipment appraisal and brokerage. 

By: NEBB Institute

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