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Employee Stock Ownership Plans vs. Employee Stock Purchase Plans

  • Employer costs. As a rule, ESOPs cost more to start and administer. Private companies are required by law to purchase ESOP shares from departing employees, which can be a major expense. In addition, private companies with ESOPs must pay appraisers to determine their stock prices each year.

Building a Company: Partnerships, Incorporation, and Employee Stock Plans
AllBusiness Exclusive: A profile of Hot Studio, a San Francisco-based design company.