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Basics: Core Concepts

Can some types of companies not offer stock options or other forms of equity compensation to their employees?

Typically, only for-profit corporations are eligible to offer stock options and other stock grants, though limited liability companies have developed innovative ways to grant the equivalent of equity stakes in the form of "capital interests" and "profit interests." Government entities, churches, nonprofits (such as hospitals or schools), mutual insurance companies, professional corporations (e.g. doctors, lawyers), and sole proprietorships do not offer stock options either because the entity is prohibited from doing so by law or because the entity is not owned by shareholders.

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