Why create an ESOP?
ESOPs are created for many purposes. For NCB customers, the primary reasons are to diversify the selling shareholder’s investment in the company, and to give employees a stake in the company, ensuring a succession plan is in place for the company’s owner(s). Return to Top Cooperative ExpansionDo co-ops pay taxes? Cooperatives pay taxes similar to other business entities. In fact, cooperatives generally pay under the same rules and regulations and at the same rates as other business organizations. Cooperatives pay property, sales, excise, school and other taxes, and comply with the same regulatory burdens as other businesses. For federal income tax purposes, cooperatives are treated similarly to the three basic types of private business organizations currently used in the United States: individually owned businesses, partnerships and corporations. In the case of individually owned businesses and partnerships, profits and losses are passed through and taxed at the individual owner level.
