The Promotion and Expansion of Private Employee Ownership Act of 2025 aims to encourage employee ownership of private companies through employee stock ownership plans (ESOPs), particularly for S corporations. The bill makes several key changes: it permanently allows business owners to defer taxes on gains from selling company stock to ESOPs (accelerating a previous deadline), removes a sunset provision that was limiting ESOP benefits, and ensures that small businesses remain eligible for Small Business Administration programs and preferences even after an ESOP acquires over 49 percent ownership. To support these goals, the legislation establishes two new government offices—a Treasury Department office to provide education and technical assistance on S corporation employee ownership and a Department of Labor position called the Advocate for Employee Ownership to promote ESOPs and coordinate with other federal agencies. The bill takes effect upon enactment, with the small business provisions taking effect on January 1 of the first calendar year after passage, and there is no specific funding amount designated—only an authorization for "such sums as may be necessary."
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