ESOP advisor in Belleville, IL. Employee stock ownership plans (ESOPs) are becoming a more and more common retirement plan for employees in various industries in Belleville, IL. They offer business owners an opportunity to transition from their company while significantly reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that builds their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most Belleville, IL business owners can do alone. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in Belleville, IL and around the nation, design tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're looking for a trustworthy financial partner in Belleville, IL who shares your goals of creating your company and employees for long-term success, call Correct Capital at 314-930-4015, contact us online, or schedule a consultation with one of our financial advisors immediately.
About Employee Stock Ownership Plans (ESOPs)
An ESOP is a qualified retirement plan where employees receive shares of the company they work for, rather than savings or investments in other companies such as in a 401(k). ESOPs are fully funded by the employer, and often times shares offered to employees are not voting shares, meaning control of the company stays with the C-suite. They offer great incentives to employees while providing businesses with a superior value proposition to employees, and allow business owners to set up a succession plan while preserving control. Upon reaching retirement, most employees sell the stock at stock market value.
Of special interest to business owners, by handing over part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to allocate that tax hit instead of being required to pay taxes immediately. In many cases, ESOPs are a succession plan that keeps the most amount of money achievable in your pocket.
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)
- Additional tax deductions through contributions made to employees
- If the business is one day 100% owned as an S-Corp by the ESOP, it's exempt from federal income taxes
- Align the goals of employees and stockholders
- Offer a higher value proposition when hiring
- Increase employee motivation and productivity
- Boost employee retention and loyalty
- Enable succession planning and business continuity
- Maintain control while arranging or easing into retirement
- Boost personal liquidity of owners, but still hold on to control of the company
- Preserve your business' legacy and culture
What About KSOPs?
A KSOP is a qualified plan that is a mix between an ESOP and a 401(k). Ownership shares are given to employees as in an ESOP, employees can contribute their own money to acquire 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 receive the benefits of both. The experienced Belleville, IL ESOP advisors and retirement consultants of Correct Capital can aid you find the best retirement plan for you, your company, and your employees.
What Our Belleville, IL 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 an experienced Belleville, IL ESOP advisory firm in your corner to reap the most benefits of your plan. When you work with Correct Capital, we:
- Lower 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 other securities to postpone capital gains taxes on the sales, permitting you to retain more of the sales proceeds for different purposes. To defer capital gains taxes, your ESOP advisor can help you carry out a Section 1042 exchange by selling at least 30% of your company to the ESOP and reinvesting the proceeds in qualified replacement securities or QRP. Taxes would be owed until the taxpayer has a disposition of the QRP. An ESOP advisor can ensure you obtain the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll create and implement an ESOP suited specifically to you and your company. We like to push ourselves and our clients to get imaginative with retirement plan offerings to optimize the advantages they provide. We'll evaluate your needs, analyze various ESOP options, and suggest a tailored ESOP that meets legal requirements and is aimed at maximizing benefits. If it makes sense, we may also advise combining an ESOP with a 401(k) or other retirement plans to additionally increase benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to grasp their needs and collaborate with them to discover the optimal tax-advantaged retirement plans for their business. 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 look at:
- Cash flow, debts, and overall financial health
- Ownership structure to understand how it'll be affected by introducing an ESOP
- Employee demographics to understand how they're best served
- Tax implications for both your company and shareholders
- Company culture and employee engagement to determine 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 partner 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 CPAs, lawyers, and a trustee to acquire stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Belleville, IL can help you set up your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the management of employee stock ownership plans. 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 demand the employer to repurchase them at market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on how long they've worked there. Most of the time, that means ownership of the company is sold to the ESOP in increments. 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 impact on your company. ESOP advisors can plan for these changes and react to them in real time, enabling your plan to stay workable, compliant, and beneficial.
- Employee communication and education — Our ESOP advisors offer group sessions and individual consultations with your employees so they can optimize the advantages from your retirement plan. With an ESOP advisor from Correct Capital, your employees won't just attain a share of your company, but they'll feel like they're gaining ownership of their financial stability and future.
Why Choose Correct Capital as Your ESOP Advisor in Belleville, IL
Correct Capital is an independent advisory firm that specializes in helping business owners create retirement plans and succession plans for their companies. There are several factors we point to that distinguish us from other investment advisory agencies in Belleville, IL, 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're experienced in retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a wide range of industries, 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 ideally suited to understand the needs of each and establish a plan that satisfies the necessities of both, as well as those of your stockholders.
- Our award-winning Belleville, IL financial advisory team is made up 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 80 years of combined experience, we pool our collective talents and insights to optimally assist 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 strive to forge long-term relationships with our clients grounded in trust and the mutual goal of growing your and your employees' financial prosperity.
Other services we offer in Belleville, IL:
- Succession Planning
- Fiduciary Financial Advisor
- 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
Call Correct Capital to Speak With an ESOP Advisor in Belleville, IL Today
If you're interested in learning more about ESOPs or desire to commence the process of setting one up for your Belleville, IL business, reach out to a Correct Capital ESOP advisor today. Let us do what we do best so you can focus on what you value most: positioning yourself, your business, and your employees up for achievement. Get in touch with one of our Belleville, IL ESOP advisors now at 314-930-4015 or contact us online.