S Corporation ESOPs must test for section 409(p) which states an S Corp ESOP cannot allocate shares to disqualified persons during any nonallocation year.

A credit facility in business finance enables companies to borrow funds over an extended period without reapplying for loans each time they need money. It functions as an umbrella loan, providing flexibility in capital generation.

Any change of the portion of equity or debt components of a company's balance sheet with the intent to change the equity owned by an EO Plan (such as ESOP or EOT)

The history of employee ownership which includes some easily defined pivotal moments such as the passing of ERISA in 1974 thanks to Louis Kelso and Russell Long

A golden share is a special type of share that grants its holder veto power over changes to a company's charter, ensuring control over critical decisions. This share typically holds at least 51% of voting rights and is issued by both private firms and government entities.

A prospectus is a formal document required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering to the public. A prospectus is filed for offerings of stocks, bonds, and mutual funds.

A budget is an estimation of revenue and expenses over a specified future period of time. A budget can be made for a person, group of people, business, non-profit, government, country, or just about anything else that makes and spends money.

A good business plan guides you through each stage of starting and managing your business. You’ll use your business plan as a roadmap for how to structure, run, and grow your new business. It’s a way to think through the key elements of your business.

Statement on Auditing Standards (SAS) 136 was issued by the AICPA’s Auditing Standards Board to address changes to audits of employee benefit plans subject to the Employee Retirement Income Security Act of 1974 (ERISA) (including ESOPs).

Senior debt is borrowed money (often from bondholders or banks that have issued revolving credit lines) that a company must repay first if it goes out of business.

Unusual circumstances for EO companies, e.g., publicly traded EO, bank as EO sponsor, LLC ESOP's, etc.

Phantom stock is a deferred compensation plan that allows plan participants to benefit from a company's share price upside without actually receiving company shares

Refers to the M&A practices of EO companies, e.g., ESOP companies purchasing other companies

A hedge fund is an LP of private investors whose money is pooled and managed by professional fund managers who use a wide range of strategies to earn above-average investment returns. A hedge fund investment is often considered a risky, alternative investment choice.

An installment sale is when a business or property is sold, and at least one payment is received after the tax year of the sale.

Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of co-operation.

Employee owned companies which are 100% owned by the employees, whether through an ESOP, EOT or worker co-op.

Any structural limitations inherent to being an EO company, e.g., an ESOP cannot pay more than fair market value when the company's stock is sold

An assessment of the required non-financial elements in selling a business, e.g., required people/talent, knowledge, partnerships, documentation, communication, etc., required for ongoing business success post-sale. Sometimes called the "people and process" aspect of feasibility.

The reduction of ownership percentage of existing shareholders in a company when new shares are issued by the company

The cost to a business of making the products it sells over a given period of time. The cost of goods sold includes parts and labor expenses, but does not include shipping, advertising, or other indirect costs. COGS is included on a company’s profit & loss/income statement and may be subtracted from revenue when calculating the company’s gross profit margin.

Typically a company's profit and loss (income statement), balance sheet, and statement of cash flows.

Cooperatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.

Rebalancing is an annual process for cash-holding ESOPs that ensures all plan participants have the same percentage breakdown of cash and company stock that the overall ESOP trust holds. Rebalancing does not increase or decrease the face value of an ESOP participant’s account balance

The combining of two EO Plans, such as what happens when an ESOP purchases another ESOP.

Typically references to companies with less than $250 million in enterprise value

A Limited Liability Company (LLC), is a company managed by members or elected managers, like a partnership, but with the financial and legal responsibility of the members limited to the amount of capital they have invested in the business.

A US Government department whose mission is to uphold the rule of law, to keep the country safe, and to protect civil rights.

In a frozen ESOP plan, further contributions stop, but the plan continues to operate. Employees receive their distributions according to the rules of the plan document. Theoretically, the plan could continue until the last participant receives a distribution.

A quality of earnings report is a routine step in the due diligence process for private acquisitions. The report assesses how a company accumulates its revenues – such as cash or non-cash, recurring or nonrecurring.