This is a common method to pay off or buy out an owners shares in a private company held through an ESOP plan. By law, the employees have to be allowed to vote on divesture and all vested employees would have to be paid off if the company were sold to a competitor. In this case, the owner will be paid for his shares either by future company profits or by loan proceeds obtained against the ESOP, which ever is the case the payments and interest are all tax deductible to the company. The employees incur no additional tax liabilitie because as plan participants they are already owners, they will pay tax on the gains above distribution at the capital gains rate at retirement or roll their proceeds over into IRA's, the usual penaties apply if proceeds are taken out early. ESOPS are the way to go for privately held, non partnered companies.
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Today's Featured Article - Hydraulics - Cylinder Anatomy - by Curtis von Fange. Let’s make one more addition to our series on hydraulics. I’ve noticed a few questions in the comment section that could pertain to hydraulic cylinders so I thought we could take a short look at this real workhorse of the circuit. Cylinders are the reason for the hydraulic circuit. They take the fluid power delivered from the pump and magically change it into mechanical power. There are many types of cylinders that one might run across on a farm scenario. Each one could take a chapter in
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