An ESOP is a qualified defined-contribution employee benefit plan that enables employees to own stock in the company that employs them. ESOPs are often used as a corporate finance and tax strategy, and are also used to align the interests of a company's employees with those of the company's owner(s). Business valuations are essential to the ESOP process. The valuations are needed both for the initial stages of the ESOP formation and implementation as well as the administration side. If shareholders of a company are considering selling shares to an ESOP, a business valuation is critical for the ESOP feasibility study. This process is an important first step that allows the owners of the company to decide whether an ESOP transaction makes sense from a business standpoint. If the owners of the company decide to pursue the ESOP structure, a fairness opinion is needed for the implementation of the ESOP (as well as if the ESOP is later sold or terminated). Once the ESOP owns the shares, the ESOP trustee is required under federal law (ERISA) to obtain an annual business valuation update to determine the value of the shares.