Author: Mathews, Anthony
Source: The Beyster Institute
Conventional wisdom would have you believe that you cannot effectively create an employee ownership culture in an LLC. After all, an LLC issues no stock, so an ESOP won’t work. You can’t issue stock options if you don’t have stock. So, CW infers, if you operate as an LLC, there is just not a good way to create that “sense of ownership” so many companies seek by using indirect ownership as a way to motivate and inspire employees. Even if you just want to give employees an interest in the company, you can’t really do that because, in an LLC (like an S-Corporation) ownership comes with pretty serious tax liabilities. To most people this seems like an impossible problem to overcome.