You may be able to arrange to pull cash out of a C corporation business tax-free by selling your shares to an employee stock ownership plan (ESOP). Here’s the background. An ESOP is simply a special type of qualified retirement plan set up for the corporation’s employees. However, unlike most other qualified plans, an ESOP is intended to invest primarily in the company’s common stock. The employer (i.e., your company) is allowed to make tax-deductible contributions to the ESOP, and there’s no current taxable income to the ESOP participants (the covered employees). A unique advantage of ESOPs: They can borrow money from the corporation, shareholders or third-party lenders. Then the ESOP can use the borrowings as leverage to acquire the initial batch of employer shares from you.