By Lian Gravelle, Esq.
For certain businesses, maintaining the certification of a woman business enterprise (WBE) or a minority business enterprise (MBE) remains crucial to its ongoing success.
The business owner at the helm of a WBE or MBE certified company may put off transitioning her business because of the fear that any likely buyer would not be able to maintain that certification.
Without the certification, many WBE or MBE companies would lose vital contracts and networking opportunities.
An employee stock ownership plan (ESOP) offers selling shareholders a unique opportunity to sell or transition ownership of their company while maintaining the WBE or MBE certification.
An owner can sell less than 51 percent of her company to the ESOP and maintain control of the company while searching for another female to purchase the majority interest. Owners looking to sell their entire interest and exit the business may find a 100% ESOP-owned company still qualifies as an MBE or WBE certified business.
In many cases, there is no other qualified female or minority who can purchase the business. Rather than lose the WBE or MBE certification that allowed the company to grow, a business owner should explore whether an ESOP is right for them.
Lian Gravelle, Esq., is an ESOP compliance counsel who works at ESOP Plus®: Schatz Brown Glassman LLP in Rochester. Visit www.esopplus.com or email firstname.lastname@example.org.