MA H503

Owners of qualified small businesses must notify all workers within 7 days of deciding to sell, including contact information for the Massachusetts Center for Employee Ownership (MassCEO) and the proposed sale price

A Qualified Employee Group (QEG) consisting of at least a simple majority of workers (minimum 3) has 30 days to signal intent to purchase and 180 days to negotiate a price based on independent valuation

Owners who complete a sale to employees are exempt from state capital gains tax on gains up to $1,000,000; gains above that threshold remain taxable

Qualifying businesses must be privately held Massachusetts companies with at least 3 workers (excluding owner), operating for at least 1 year, and meeting SBA small business size standards

Employee-owned businesses must provide equal voting rights to all worker-owners and distribute profits based on labor patronage; existing union and collective bargaining agreements must be honored after the sale