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Employee Stock Ownership Plans

Employee Stock Ownership Plans (ESOPs) are qualified retirement plans that invest primarily in employer securities of the corporation that establishes the ESOP.

An ESOP is a unique planning vehicle since it is both a financial tool and a retirement plan. Congress has created many special tax incentives designed to encourage the establishment of ESOPs and the concomitant increased employee ownership by employees who are participants in the ESOP. These tax incentives, when combined with the fiduciary rules imposed on retirement plans by the Employee Retirement Income Security Act of 1974, as amended (ERISA), create a tangled web of great financial opportunity and traps for the unwary.

The ESOP practice at K&L Gates has been involved with ESOPs and related transactions since their inception and brings to bear on behalf of its clients the benefit of over 30 years of experience. The ESOP practice provides a complete range of services relating to ESOPs, including the establishment of ESOPs, the structuring of corporate transactions involving ESOPs, fiduciary issues relating to ESOPs, S-Corporations as they relate to ESOPs, and the special tax opportunities associated with ESOP transactions.

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