Seems to happen once the founder retires. My little brother's tile laying business is going to distribute ownership to the employees based on years + skill once the founder retires. They're already highly paid and treated well (they even have a 401k match which is surprising for a little 30 employee construction company). I think it's the way to go unless you have heirs that you want to run the company.

That sounds different than a co-op. The interesting and tricky part about a co-op is navigating entry and exit.

Isn't a coop just an employee owned company?

Worker co-ops are employee-owned companies, but not all employee owned companies are co-ops.

The point that I was highlighting was that it comes down to the Articles of Incorporation and how ownership is managed on an ongoing basis. What happens when someone retires or you hire someone new.

If I were to retire and simply give my company to my 10 employees, Nothing would stop them from hiring new employees and not sharing ownership, leaving the company and keeping ownership, or selling their ownership to a third party.

I appreciate the extra information and that's exactly what I was looking for with my question. Makes total sense.