The sale of the company to employees is an exit strategy.

Question

Quizplus · Accepted Answer

The sale of a company to its employees is a legitimate exit strategy, known as an Employee Stock Ownership Plan (ESOP). In an ESOP, the company sets up a trust fund that owns a portion of the company's stock, which is then distributed to employees as a form of retirement benefit. Essentially, the employees "buy" the company from the current owners, with the sale price being funded by the company's future profits. This allows the owners to exit the business while ensuring continuity of ownership and control, as the employees become the new owners.

The Sale of the Company to Employees Is an Exit