ESOP advisor in Brentwood, MO. Employee stock ownership plans (ESOPs) are becoming a more and more well-liked retirement benefit for employees in a variety of sectors in Brentwood, MO. They offer business owners an opportunity to move on from their company while significantly reducing taxes on the sale, and offer employees a qualified retirement plan that increases their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Brentwood, MO business owners can do without professional help. Correct Capital's knowledgeable and savvy ESOP advisors help businesses of all sizes, in Brentwood, MO and around the U.S., design tailored retirement plans that benefit themselves, their employees, and their profit.
If you're seeking a trustworthy financial partner in Brentwood, MO who shares your goals of establishing your company and employees for long-term success, call Correct Capital at 877-930-4015, contact us online, or schedule an appointment with one of our financial advisors today.
What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a qualified retirement plan where employees receive stock of the company that employs them, rather than savings funds or investments in other companies such as in a 401(k). ESOPs are 100% company funded, and often times shares offered to employees are not decision-making shares, meaning control of the company stays with ownership and other executives. They offer excellent incentives to employees while providing businesses with an improved value proposition in the hiring process, and allow business owners to set up a succession plan while retaining control. When they retire, most employees sell the stock at market value value.
Of special interest to business owners, by selling part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to allocate the tax consequences of the sale instead of needing to pay taxes at once. In many cases, ESOPs are a transition 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 eventually 100% owned as an S-Corp by the ESOP, it's free from federal income taxes
- Align the goals of employees and stockholders
- Provide a higher value proposition when hiring
- Boost employee motivation and productivity
- Boost employee retention and loyalty
- Facilitate succession planning and business continuity
- Retain control while planning or easing into retirement
- Raise personal liquidity of owners, but still retain control of the company
- Preserve 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 offered to employees as in an ESOP, employees can put in their own money to obtain additional stock through payroll deductions, or the company can match employee contributions with stock instead of cash.
Setting up a stock ownership plan doesn't have to exclude your employees from more diverse investments. In fact, adding an ESOP or KSOP to a more traditional retirement plan allows you to attain the benefits of both. The experienced Brentwood, MO ESOP advisors and retirement consultants of Correct Capital can help you find the right plans for your business.
What Our Brentwood, MO ESOP Advisors Do for You
Whether you're motivated by a succession plan, employee incentives, or any other of ESOPs' benefits, you'll need a knowledgeable Brentwood, MO ESOP advisory firm by your side to reap the most benefits of your plan. When you work with Correct Capital, we:
- Reduce your tax liability as much as possible — When you sell your ownership shares to an ESOP, you can reinvest the proceeds in other securities to postpone capital gains taxes on the sales, allowing you to retain more of the sales proceeds for other 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 that money in qualified replacement securities or QRP. Taxes would be payable until the taxpayer has a sale of the QRP. An ESOP advisor can assure you obtain the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll create and execute an ESOP that works best for you and your unique company. We like to test ourselves and our clients to get innovative with retirement plan offerings to enhance the advantages they provide. We'll evaluate your needs, assess different ESOP options, and suggest a customized ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it'll work, we may also recommend combining an ESOP with a 401(k) or different retirement plans to additionally augment benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to comprehend their needs and work together with them to discover the best qualified retirement plans for their business. For clients interested in an ESOP, part of that means carrying out a feasibility analysis to determine if it's a viable 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 accountants, attorneys, and a trustee to buy stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Brentwood, MO can help you arrange your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the management of employee stock ownership plans. For instance, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the right to require the employer to buy back them at fair market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on how long they've worked there. Usually, that means ownership of the company is passed to the ESOP in stages. 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 evolves and matures, so will its implications for your company. ESOP advisors can plan for these changes and react to them in real time, enabling your plan to stay workable, in accordance with regulations, 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 gaining ownership of their financial health and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Brentwood, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners create retirement plans and succession plans for their businesses. There are multiple factors we point to that set us apart from other financial consulting companies in Brentwood, MO, and throughout the United States:
- 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 when managing retirement plans, we're ideally suited to understand the needs of each and establish a plan that meets the requirements of both, as well as those of your stockholders.
- As independent fiduciary advisors, we are legally and ethically bound to do what's in the best interest of you, your employees, and your company. We strive to form long-term relationships with our clients grounded in trust and the mutual goal of expanding your and your employees' financial prosperity.
Other services we offer in Brentwood, MO:
Call Correct Capital to Speak With an ESOP Advisor in Brentwood, MO Today
If you're interested in learning more about ESOPs or desire to commence the process of setting one up for your Brentwood, MO business, get in touch with a Correct Capital ESOP advisor now. Let us do what we do best so you can concentrate on what you care about most: positioning yourself, your business, and your employees up for achievement. Get in touch with one of our Brentwood, MO ESOP advisors immediately at 877-930-4015 or contact us online.
