Your privately held corporation has weathered economic cycles. As a successful entrepreneur, you have made sacrifices and persevered to build a successful business. Through the use of an Employee Stock Ownership Plan (ESOP) for business planning, Morgan Stanley can help business owners to protect wealth and diversify through the use of an ESOP business succession plan.
An Employee Stock Ownership Plan (ESOP) is a tool available to many of today's small to midsized companies and their owners. Under the right circumstances, businesses can realize tax deductions, raise tax-efficient capital to fund expansions or acquisitions, and attract, retain and motivate employees with an important benefit linked to corporate performance.
In addition, an ESOP may have many advantages for a business owner. Through an ESOP, a business owner may be able to:
- Sell all or part of an equity interest in a company either in one sale or multiple stages.
- Diversify wealth accumulated in a business.
- Defer capital gains taxes on the sale of equity in a business.
- Transfer control of the business to the next family generation.
- Further estate and trust planning objectives.
Morgan Stanley can help business owners and their companies to meet these goals. Through our ESOP Transaction Services Group, we bring broad knowledge and resources, and we know how to navigate in the ESOP business. We work as a team to help turn the entire process into a manageable, achievable benefit for our clients. Morgan Stanley is known worldwide for its financial services.
We can work with a business owner to deliver a personalized solution tailored to help meet individual investment objectives.
ESOP services provided through Morgan Stanley affiliates:
- Morgan Stanley ESOP Transaction Services Group
- Morgan Stanley & Co. Incorporated
- Morgan Stanley Commercial Financial Services, Inc.
Morgan Stanley ESOP Transaction Services Group is a division of Morgan Stanley Commercial Financial Services, Inc.
The tax advantages available through ESOP transactions are governed by complex laws and regulations. Morgan Stanley and its Financial Advisors do not provide tax or legal advice. Please consult your personal tax advisors for all tax-related matters and your legal advisor for all legal matters.
Morgan Stanley & Co. Incorporated is a registered broker-dealer, member SIPC. Morgan Stanley & Co. Incorporated offers investments and related services. Morgan Stanley & Co. Incorporated and its affiliates may, for certain transactions, provide investment and related services, as well as ESOP advice. In the same transactions, Morgan Stanley Commercial Financial Services, Inc. may also lend to corporate borrowers and to selling shareholders seeking to monetize qualified replacement property.
An ESOP transaction may not be appropriate for your company. The risks of doing an ESOP transaction may include those associated with the leverage required to support an ESOP. To determine if an ESOP is appropriate for your company, consult your tax advisor and/or your attorney.
Morgan Stanley Commercial Financial Services, Inc. (CFS) has relationships with other financial institutions that provide financing for ESOP transactions. CFS may earn compensation for referring transactions to these other financial institutions. Also, Morgan Stanley & Co. Incorporated, CFS and their affiliates may have existing or future business relationships with one or more of these other financial institutions. Morgan Stanley Financial Advisors may receive compensation if your business selects BusinesScape products or services.
Loans to finance the purchase of stock in ESOP transactions and to monetize qualified replacement property are made by Morgan Stanley Commercial Financial Services, Inc. (CFS) and are subject to its internal standards and credit approval. Pricing may vary based on a variety of factors. In California, CFS offers lending products pursuant to a California Department of Corporations Finance Lender License.
