Bill > H503

This bill proposes a comprehensive framework to promote employee ownership of small businesses in Massachusetts by establishing a process and incentives for workers to purchase their companies. The legislation defines a "Qualified Business" as a privately held, Massachusetts-based enterprise meeting specific criteria, including having at least three workers and being considered a small business by U.S. Small Business Administration standards. When an owner decides to sell their business, they must notify all workers within seven days and provide contact information for the Massachusetts Center for Employee Ownership (MassCEO). Workers then have 30 days to form a Qualified Employee Group (QEG) and signal their intent to purchase the business. If a QEG is interested, the owner and workers have 180 days to agree on a business valuation and sale price. As an incentive, the bill offers a state capital gains tax exemption of up to $1,000,000 for owners who sell to their employees, provided the sale results in an employee-owned business with democratic governance (where workers have equal voting rights and decision-making power). The legislation also ensures that existing labor agreements remain in effect and prohibits external governance or management influence from non-worker parties, thereby promoting a more inclusive and worker-centered approach to business ownership succession.

Business and Industry

https://malegislature.gov/Bills/194/H503