New Federal Funding and Rules to Boost Employee Ownership of Small Businesses.
This law establishes a new federal financing facility (up to $5 billion annually) to help employees acquire majority ownership in small businesses through Employee Stock Ownership Plans (ESOPs) or worker cooperatives. It mandates strong protections, such as independent trustees and fairness opinions, to safeguard employee interests during these transitions. Furthermore, businesses moving to employee ownership can temporarily retain access to federal set-aside procurement contracts.
Key points
Creates a $5 billion annual Employee Equity Investment Facility to finance employee buyouts of small businesses.
Requires that employees gain majority ownership (over 50% of stock) in transactions funded by this program.
Implements strict safeguards, including independent trustees and fairness opinions, to protect employee financial interests in ESOP transactions.
Allows employee-owned firms a two-year grace period to maintain eligibility for certain federal procurement contracts.
Expired
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