There are more than 11,000 private companies offering Employee Stock Ownership Plans, with 15 new companies being added each year, according to Louisville-based UBS Financial Services.

UBS, along with the Kentucky Association for Economic Development, hosted a meeting on ESOPs Friday at the Bowling Green Area Chamber of Commerce.

Financial adviser Jeffrey Adkins said it was only appropriate to have the meeting in Bowling Green, which is home to Houchens Industries, the nation's largest ESOP with more than 11,000 employees.

Adkins touted ESOPs as giving small business owners a way to sell equity in the company while helping ensure the company remains open and local.

Mike Mangeot, president and CEO of the Kentucky Association for Economic Development, said ESOPs help local businesses grow while retaining them.

ESOPs put the ownership of a business in the hands of the employees and offer a variety of benefits, some of which include:

€Provide an option for someone looking to transition out of their business. Adkins said the ESOP is the legal shareholder or owning entity who will have the voting ownership of the stock offered.

The day-to-day ongoing business and the running of the business normally stay the same.

€Allows business owners seeking to sell a chance to gain liquidity or convert the value of the business to cash while allowing owners to retain substantial control.

€Enables business owners to sell company at current fair market value.

€Allows a structured manner where proceeds can be obtained by selling to shareholders without paying capital gains taxes as allowed in IRS code 1042.

€ESOPs can be a company's development and growth strategy because of the tax incentives, which will allow the company to deal with certain transactions without paying taxes.

€A way to tie key employees to the company as a incentive and motivator.

It also can help preserve a company's legacy and business owner's permanent succession plan, according to UBS.

Chris Bixler, program coordinator for the Western Kentucky Small Business Development Center, said the seminar is helpful because it gives small business owners viable options to consider.

For those who are interested in ESOPs, the process can seem complicated, but UBS says selling your business to a third-party is also complicated.

Keep in mind the following:

€Always bring in qualified professionals when considering an ESOP, such as a team consisting of an accountant an attorney and other advisers.

€Know an ESOP isn't for every business. ESOPs are good for middle market companies worth anywhere from $2 million to $200 million, with at least 25 employees and a management team ready for the transition.

€Check the vesting schedules - employees usually have to work at a company for at least a year and be full time, according to UBS.

ESOPs are governed by the same laws that govern pension plans under the Employee Retirement Income Security Act of 1974 (ERISA), a federal law that sets minimum standards for pension plans in private industry, according to the Department of Labor.

Dan Preston, vice president of economic development for the chamber of commerce, said Bowling Green and surrounding areas offer a host of experts who are versed in ESOP work because of Houchens, an accounting firm located in downtown Bowling Green.