RC Kennedy Consulting announces partnership with MBO Ventures

In keeping with our mission of assisting companies large and small with a full spectrum of services, RCK Consulting is excited to announce a partnership with MBO Ventures. MBO is an investment firm that specializes in M&A activities for SMBs.

MBO is a leader in managing Employee Stock Ownership Plans (ESOP) for companies. The ESOP is a program for distributing equity that holds tremendous tax advantages for both the owners and employees (including next generation family members) where an exit or transfer of ownership is under consideration. ESOPs were designed by Congress to incentivize owners to sell to their employees instead of an outside buyer.

Highlights of the ESOP program include:

• The buyers (your employees) do not have to raise the capital for the purchase. The ESOP is funded through company loans based on cash flow and/or assets to fund the buyout.

• The government subsidizes these loans. The IRS allows the company to deduct both the principal and interest of the loans to fund the ESOP. Those savings can then be used to pay down the loan.

• Income taxes on the company are reduced or even eliminated.

• The owner receives a payment for the full amount when the ESOP is established. Capital gains tax on the sale can be deferred (indefinitely).

There are many other advantages. Any business owner(s) looking to raise cash or sell their business should consider an ESOP as the mechanism for doing so. As your partner, MBO works with leading banks, like JP Morgan, to structure ESOP programs for their customers. Your first step would be to have MBO do a quick evaluation of the scope and eligibility of your business for an ESOP. From there, MBO will manage the process with the bank to make it all happen. 

Interested? Contact us at info@rcksc.com to get in contact with us.