ESOP advisor in Central West End, MO. Employee stock ownership plans (ESOPs) have become an increasingly common retirement plan for employees in a variety of sectors in Central West End, MO. They offer business owners an opportunity to transition from their company while substantially reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that increases their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Central West End, MO business owners can do by themselves. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in Central West End, MO and around the United States, design tailored retirement plans that benefit themselves, their employees, and their profit.
If you're in search of a trustworthy financial partner in Central West End, MO who shares your goals of setting up your company and employees for sustained success, call Correct Capital at 877-930-4015, contact us online, or schedule an appointment with one of our financial advisors today.
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Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
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About Employee Stock Ownership Plans (ESOPs)
An ESOP is a tax-advantaged retirement plan where employees receive shares of the company they work for, rather than savings accounts 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 ownership and other executives. They offer fantastic incentives to employees while providing businesses with a better value proposition to employees, and allow business owners to set up a succession plan while maintaining control. When they retire, most employees sell the stock at stock market value.
Perhaps even more importantly, by transferring part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to spread out that tax hit instead of having to pay taxes right away. 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)
- 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
- Offer a higher value proposition when hiring
- Increase employee motivation and productivity
- Enhance employee retention and loyalty
- Ease succession planning and business continuity
- Maintain control while arranging or easing into retirement
- Amplify personal liquidity of owners, but still keep control of the company
- Preserve your business' legacy and culture
What About KSOPs?
A KSOP is a tax-advantaged plan that is a combination of an ESOP and a 401(k). Ownership shares are offered to employees as in an ESOP, employees can deposit their own money to acquire 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 the risk tolerance that comes with diverse investments. In fact, introducing an ESOP or KSOP to a more traditional retirement plan allows you to attain the benefits of both. The experienced Central West End, MO ESOP advisors and retirement consultants of Correct Capital can help you find the best retirement plan for you, your business, and your employees.
How Our Central West End, MO ESOP Advisors Can Help
Whether you're motivated by a succession plan, employee incentives, or any other of ESOPs' benefits, you'll need an experienced Central West End, MO ESOP advisory firm by your side 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 can reinvest the proceeds in different securities to defer capital gains taxes on the sales, permitting you to retain more of the sales proceeds for various purposes. To postpone capital gains taxes, your ESOP advisor can help you perform 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 disposition 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 develop and execute an ESOP suited specifically to you and your company. We like to push ourselves and our clients to get creative with retirement plan offerings to enhance the advantages they provide. We'll assess your needs, assess several ESOP options, and suggest a tailored ESOP that meets legal requirements and is aimed at optimizing benefits. If it makes sense, we may also suggest combining an ESOP with a 401(k) or alternative retirement plans to additionally augment benefits, yet retain 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 interested in an ESOP, part of that means performing a feasibility analysis to establish 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 how they're best served
- 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 collaborate 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 buy stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Central West End, MO can help you set up your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict guidelines for the oversight of ESOPs. For example, 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 current market price.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on duration 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 adapt to them in real time, facilitating your plan to stay feasible, in accordance with regulations, and beneficial.
- Employee communication and education — Our ESOP advisors offer group meetings and one-on-one meetings 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 partial ownership of your company, but they'll feel like they're achieving ownership of their financial stability and future.
Why Choose Correct Capital as Your ESOP Advisor in Central West End, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners establish retirement plans and succession plans for their businesses. There are numerous factors we believe distinguish us from other financial advisory firms in Central West End, MO, and throughout the United States:
- We know retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a wide range of sectors, including for construction companies and contractors. As we work with both businesses and individuals and families to assist in setting up retirement plans, we're ideally suited to understand the demands of each and develop a plan that fulfills the requirements of both, as well as those of your stockholders.
- 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 founded on trust and the mutual goal of growing your and your employees' financial prosperity.
Other services we offer in Central West End, MO:
Call Correct Capital to Speak With an ESOP Advisor in Central West End, MO Today
If you're interested in learning more about ESOPs or desire to start the process of setting one up for your Central West End, MO business, reach out to a Correct Capital ESOP advisor now. Let us do what we do best so you can prioritize on what you care about most: setting yourself, your business, and your employees up for prosperity. Contact with one of our Central West End, MO ESOP advisors today at 877-930-4015 or contact us online.
