ESOP advisor in Chesterfield, MO. Employee stock ownership plans (ESOPs) have become an increasingly common retirement plan for employees in various industries in Chesterfield, MO. They offer business owners an opportunity to move on from their company while significantly 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 Chesterfield, MO business owners can do by themselves. Correct Capital's proficient and savvy ESOP advisors help businesses of all sizes, in Chesterfield, MO and around the country, design tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're in search of an experienced financial partner in Chesterfield, MO who shares your goals of establishing 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 right away.
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 such as in a 401(k). 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 great incentives to employees while providing businesses with an improved value proposition to employees, and allow business owners to set up a succession plan while maintaining control. Upon reaching retirement, most employees sell the stock at market value value.
Of special interest to business owners, by transferring 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 needing to pay taxes at once. In many cases, ESOPs are a transition plan that keeps the most amount of money achievable 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)
- 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 free from federal income taxes
- Align the goals of employees and stockholders
- Provide a higher value proposition when hiring
- Increase employee motivation and productivity
- Enhance employee retention and loyalty
- Ease succession planning and business continuity
- Keep control while arranging 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 qualified plan that is a mix between an ESOP and a 401(k). Ownership shares are provided to employees as in an ESOP, employees can put in their own money to buy additional shares 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 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 Chesterfield, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the best retirement plan for you, your business, and your employees.
How Our Chesterfield, MO ESOP Advisors Can Help
Whether you're motivated by a succession plan, employee incentives, or any other of ESOPs' benefits, you'll need a knowledgeable Chesterfield, 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 sell your ownership shares to an ESOP, you have the option to reinvest the proceeds in different securities to defer capital gains taxes on the sales, allowing you to retain more of the sales proceeds for different purposes. To defer 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 payable until the taxpayer has a disposition of the QRP. An ESOP advisor can assure you get the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll develop and implement an ESOP that works best for you and your distinctive company. We like to push ourselves and our clients to get imaginative with retirement plan offerings to enhance the benefits they provide. We'll assess your needs, analyze several ESOP options, and suggest a tailored ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it's a good idea, we may also suggest 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 understand their needs and collaborate with them to identify the best qualified 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 how it'll be affected by 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 assess 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, lawyers, and a trustee to purchase stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Chesterfield, MO can help you establish your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the management of ESOPs. For instance, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the option to require the employer to repurchase them at fair 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 passed 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 evolves 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 profitable.
- Employee communication and education — Our ESOP advisors offer group meetings and personalized meetings with your employees so they can maximize the benefits 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 obtaining ownership of their financial health and future.
Why Choose Correct Capital as Your ESOP Advisor in Chesterfield, MO
Correct Capital is an independent advisory firm that specializes in helping business owners establish retirement plans and succession plans for their enterprises. There are numerous factors we point to that set us apart from other financial advisory firms in Chesterfield, MO, and across the country:
- 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 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 well-prepared to understand the demands of each and establish a plan that meets the necessities of both, as well as those of your stockholders.
- Our award-winning Chesterfield, MO financial advisory team is composed of a wide 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 distinctively.
- As independent fiduciary advisors, we are legally and morally 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 founded on trust and the mutual goal of expanding your and your employees' wealth.
Other services we offer in Chesterfield, MO:
- 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 Chesterfield, MO Today
If you're interested in learning more about ESOPs or aspire to commence the process of setting one up for your Chesterfield, MO business, get in touch with a Correct Capital ESOP advisor today. Let us do what we do best so you can prioritize on what you value most: positioning yourself, your business, and your employees up for achievement. Reach out with one of our Chesterfield, MO ESOP advisors now at 314-930-4015 or contact us online.