Welcome to Sterling Support Group LLC, an independent fiduciary to a company’s Employee Stock Ownership Plan and Trust. Sterling provides employee representation as an ESOP is formed and funded.
Employee Stock Ownership Plan Support
ESOP’s are qualified retirement plans permitted under the Internal Revenue Service Code designed to invest primarily in employer stock. An ESOP must comply with provisions found in the Code as well as the Employee Retirement Income Security Act of 1974, as amended. This Act, known more commonly as ERISA, places additional requirements on ESOPs to gain qualified status. ESOPs can be very powerful vehicles to assist the owners of small and middle market companies to fund markets for the shareholders of closely held companies, finance acquisitions, provide capital for expansion as well as operating a retirement plan for company employees.
ESOPs offer the benefit of tax advantaged buy-outs of shares from the owner(s) of closely held companies while providing a method for the owner(s) to defer taxation on the sales of company stock. Employees receive the benefit of becoming owners of the company which can enhance an ownership culture among the rank and file. The rules governing ESOPs impose strict fiduciary responsibilities on the trustee(s) of the Plan as the ESOP must be operated for the ‘exclusive benefit of the plan participants and their beneficiaries.'
Sterling is available to serve as an ESOP trustee nationwide and offer the following services to our clients:
Independent Trustee. Sterling Support Group, LLC represents the Employee Stock Ownership Plan and Trust and the plan participants in the transaction. We bring experience, independence and regulatory knowledge to the ESOP process.
Directed Trustee. On a continuing basis, once engaged by the Board of Directors, Sterling assists the ESOP Committee with its directions and determines if the Plan documents are being followed and if the administration of the Plan meets the requirements of ERISA.
Professional Support Services for Employee Stock Ownership Plans:
• Transaction Trustee Services
• Continuing Trustee Services
• ESOP Feasibility Services
• Transaction Assessment Reviews
• Replacement (Successor) Trustee Services
• Business Sales/ Acquisitions
• Corporate Governance Support
• Multiple Step Purchases
Generally our clients are small, closely held businesses where the owners are seeking an exit strategy for themselves in preparation for retirement. We often find a close relationship between the entrepreneur and his/her employees and a willingness to assist those who have helped with the business’ success. In many instances the owner(s) are interested in selling their business over multiple years so as to remain in a management role with the enterprise.
Client Industries Served:
• Internet Sales
• Global Sign Project Management
• Underwater Diving and Related Services
• Precision Machining
• Protein Sales
Sterling Support Group, LLC is an organization prepared to act as an independent fiduciary to a company’s Employee Stock Ownership Plan and Trust. Sterling would typically enter into a contract with a company to provide employee representation as an ESOP is formed and funded. Due diligence would be undertaken which would involve a review of the historical financials, company history and company financial projections. An independent business valuator would be engaged to price the shares of stock to be acquired from the company and or its owners. Interviews and an on-site visit would occur to provide the independent trustee with information that supports a fair market value price for the stock and protection for company employees that the ESOP transaction is fair and in their best interest. The independent trustee develops its position that the proposed transaction is fair and then assists with the closing of the transaction on behalf of the ESOP.
We will quote an all inclusive fee on gaining an understanding of the ESOP project, it size and complexity. Fees are priced to include travel expense. Separate fees would be negotiated for a continuing relationship to review periodic valuations or new transactions.