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Employee Stock Ownership Plan (ESOP)

Feasibility Study

Assistance Creating an ESOP Feasibility Study

Iowa incentivizes the creation of ESOPs to retain businesses. Companies with an ESOP can sell the business to its employees when the owners retire or start a new business. An ESOP allows owners to share equity with employees and provides a retirement plan for those employees.

The Iowa Economic Development Authority (IEDA) helps Iowa business owners complete the first step of setting up an ESOP - a feasibility study conducted by an independent financial professional.

  • Reimburses 50% (not to exceed $25,000) of the cost incurred to obtain a feasibility study
  • Reimbursement is dispersed in two stages:  half is released upon conclusion of the feasibility study and the remaining half after successful formation of the ESOP
  • Iowa offers a 50% reduction from state income taxes for the net gain from the sale of stock to an ESOP
  • Read the full ESOP Administrative Rules

Who Qualifies?

  • Must be an Iowa-based company
  • Applicants who have completed a feasibility study prior to applying are not eligible
  • Retail businesses are not eligible
  • Business structures other than corporations are not eligible; businesses that intend to become a corporation as part of a potential transition to an ESOP, may provide a letter of intent describing plans to incorporate

How Do I Apply?

Review the application instructions. IEDA must receive a substantially completed application prior to completion of a feasibility study.

Resources

Related Programs

ESOP Formation Assistance Advisory Panel Meeting Agendas

For more information, contact:

Megan Andrew

515.348.6147
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