ESOP advisor in Arnold, MO. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement benefit for employees in various industries in Arnold, MO. They offer business owners a chance to move on from their company while considerably reducing taxes on the sale, and offer employees a qualified retirement plan that increases their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most Arnold, MO business owners can do by themselves. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in Arnold, MO and around the nation, create tailored retirement plans that benefit themselves, their employees, and their profit.
If you're seeking an experienced financial partner in Arnold, MO who shares your goals of building your company and employees for prolonged success, call Correct Capital at 314-930-4015, contact us online, or schedule an appointment with one of our financial advisors now.
What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a tax-advantaged retirement plan where employees receive shares of the company that employs them, rather than savings funds or investments in other companies as in a typical retirement plan. ESOPs are fully funded by the employer, and often times shares offered to employees are not decision-making shares, meaning control of the company stays with the C-suite. They offer great incentives to employees while providing businesses with a better value proposition to employees, and allow business owners to set up a succession plan while retaining control. Upon reaching retirement, most employees sell the stock at market value.
Perhaps even more importantly, by handing over part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to distribute the tax consequences of the sale instead of having to pay taxes immediately. In many cases, ESOPs are a succession plan that keeps the most amount of money possible with the owner.
Benefits of an Employee Stock Ownership Plan
- Sell a portion of your business (minimum 30%) with deferment of capital gains taxes (provided you reinvest into qualified replacement securities)
- Extra tax deductions through contributions made to employees
- If the business is one day 100% owned as an S-Corp by the ESOP, it's free from federal income taxes
- Align the goals of employees and stockholders
- Present a higher value proposition when hiring
- Boost employee motivation and productivity
- Enhance employee retention and loyalty
- Ease succession planning and business continuity
- Maintain control while organizing or easing into retirement
- Raise personal liquidity of owners, but still keep control of the company
- Carry on your business' legacy and culture
What About KSOPs?
A KSOP is a similar type of plan that is a mix between an ESOP and a 401(k). Ownership shares are provided to employees as in an ESOP, employees can add their own money to buy additional stock through payroll deductions, or the company can match employee contributions with shares rather than cash.
Setting up a stock ownership plan doesn't have to exclude your employees from the risk tolerance that comes with diverse investments. In fact, including an ESOP or KSOP to a more traditional retirement plan allows you to obtain the benefits of both. The experienced Arnold, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the right plans for your business.
What Our Arnold, MO ESOP Advisors Do for You
Whether you're moving on from ownership of your company or are interested in an ESOP's other benefits, you'll need a knowledgeable Arnold, MO ESOP advisory firm to partner with to get the most out of your plan. When you work with Correct Capital, we:
- Minimize your tax liability as much as possible — When you transfer your ownership shares to an ESOP, you have the option to reinvest the proceeds in alternative securities to defer capital gains taxes on the sales, permitting you to retain more of the profit. To postpone capital gains taxes, your ESOP advisor can help you execute a Section 1042 exchange by selling at least 30% of your company to the ESOP and reinvesting that money in qualified replacement securities or QRP. Taxes would be owed until the taxpayer has a sale of the QRP. An ESOP advisor can ensure you receive the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll develop and implement an ESOP suited specifically to you and your company. We like to test ourselves and our clients to get creative with retirement plan offerings to enhance the advantages they provide. We'll examine your needs, analyze several ESOP options, and propose a customized ESOP that meets legal requirements and is aimed at maximizing benefits. If we believe it's a good idea, we may also advise combining an ESOP with a 401(k) or different retirement plans to further augment benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to comprehend their needs and collaborate with them to discover the best tax-advantaged retirement plans for their company. For clients looking at an ESOP, part of that means performing a feasibility analysis to determine if it's a feasible option for your company. We'll examine:
- Cash flow, debts, and overall financial health
- Ownership structure to understand the implications of introducing an ESOP
- Employee demographics to understand what they need from their retirement plan
- Tax implications for both your company and shareholders
- Company culture and employee engagement to see if an ESOP is likely to be well-received and supported
What if your business isn't a great fit for an ESOP? We'll work with you to find a retirement or succession plan that works for you.
- Connect you with valuation firms and trustees — Implementing and maintaining an ESOP involves a lot of moving parts, including accountants, attorneys, and a trustee to purchase stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Arnold, MO can help you arrange your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict requirements for the oversight of ESOPs. For instance, when individuals enrolled in an employee stock ownership plan at a closely held employer receive company stock in an ESOP distribution, they have the option to require the employer to buy back them at market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on seniority of service. Usually, that means ownership of the company is sold to the ESOP in phases. Depending on how you structure your company and the plan, your ESOP may start with 30%, but could ultimately achieve 100% ownership. As the plan progresses and matures, so will its implications for your company. ESOP advisors can plan for these changes and respond to them in real time, enabling your plan to stay viable, compliant, and beneficial.
- Employee communication and education — Our ESOP advisors offer collective workshops and individual consultations with your employees so they can get the most from your retirement plan. With an ESOP advisor from Correct Capital, your employees won't just acquire a portion of your company, but they'll feel like they're obtaining ownership of their financial health and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Arnold, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners create retirement plans and succession plans for their enterprises. There are numerous factors we believe set us apart from other financial consulting companies in Arnold, MO, and throughout the nation:
- A member of the National Association of Plan Advisors (NAPA), Correct Capital was recently named one of their Top Defined Contribution (DC) Teams with Assets under Advisement of at least $100 million. Correct Capital is the only advisory firm in Missouri to achieve this distinction.
- We know retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a variety of sectors, including for construction companies and contractors. As we work with both businesses and individuals and families to aid in setting up retirement plans, we're perfectly positioned to understand the needs of each and develop a plan that fulfills the requirements of both, as well as those of your stockholders.
- Our award-winning Arnold, MO financial advisory team is composed of a diverse range of financial expertise, including an Accredited Investment Fiduciary®, multiple CERTIFIED FINANCIAL PLANNER™ professionals, a certified public accountant, and a six-time Barron's Top 1200 Advisor. With over eight decades of combined experience, we pool our collective talents and insights to best serve each client uniquely.
- As independent fiduciary advisors, we are lawfully and ethically bound to do what's in the best interest of you, your employees, and your company. We aim to form long-term relationships with our clients based on trust and the common goal of expanding your and your employees' financial prosperity.
Other services we offer in Arnold, MO:
- Company 401(k) Plans
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
- Social Security Consultants Near Me
- Retirement Calculator
- Retirement Planning
- Rollover 401(k)
Call Correct Capital to Speak With an ESOP Advisor in Arnold, MO Today
If you're interested in learning more about ESOPs or desire to start the process of setting one up for your Arnold, MO business, contact a Correct Capital ESOP advisor today. Let us do what we do best so you can concentrate on what you value most: setting yourself, your business, and your employees up for prosperity. Get in touch with one of our Arnold, MO ESOP advisors immediately at 314-930-4015 or contact us online.