ESOP advisor in Chesterfield, MO. Employee stock ownership plans (ESOPs) have become an increasingly popular retirement plan for employees in various industries in Chesterfield, MO. They offer business owners an opportunity to pass the torch from their company while significantly reducing taxes on the sale, and offer employees a qualified retirement plan that builds 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 experienced and savvy ESOP advisors help businesses of all sizes, in Chesterfield, MO and around the U.S., design tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're looking for an experienced financial partner in Chesterfield, MO who shares your goals of establishing your company and employees for enduring success, call Correct Capital at 877-930-4015, contact us online, or schedule an appointment with one of our financial advisors at this moment.
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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 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 voting shares, meaning control of the company stays with the C-suite. They offer superb incentives to employees while providing businesses with a better value proposition in the hiring process, and allow business owners to set up a succession plan while preserving control. Upon reaching retirement, most employees sell the stock at market 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 allocate the tax consequences of the sale instead of having to pay taxes right away. In many cases, ESOPs are a transition plan that keeps the most amount of money feasible 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 eventually 100% owned as an S-Corp by the ESOP, it's not subject to federal income taxes
- Align the goals of employees and stockholders
- Present a higher value proposition when hiring
- Increase employee motivation and productivity
- Enhance employee retention and loyalty
- Simplify succession planning and business continuity
- Maintain control while organizing or easing into retirement
- Boost personal liquidity of owners, but still retain 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 obtain additional stock through payroll deductions, or the company can match employee contributions with stock 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, introducing an ESOP or KSOP to a more traditional retirement plan allows you to receive the benefits of both. The experienced Chesterfield, MO ESOP advisors and retirement consultants of Correct Capital can help you find the best retirement plan for you, your company, 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 an experienced Chesterfield, MO ESOP advisory firm to partner with to reap the most benefits of your plan. When you work with Correct Capital, we:
- Minimize 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 postpone capital gains taxes on the sales, allowing you to keep more of the sales proceeds for various 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 the proceeds in qualified replacement securities or QRP. Taxes would be payable until the taxpayer has a disposition of the QRP. An ESOP advisor can guarantee you obtain 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 unique company. We like to test ourselves and our clients to get imaginative with retirement plan offerings to optimize the benefits they provide. We'll examine your needs, assess various ESOP options, and propose a customized 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 other retirement plans to additionally boost benefits, yet retain efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to grasp their needs and work together with them to find the best tax-advantaged retirement plans for their business. For clients looking at an ESOP, part of that means conducting a feasibility analysis to establish if it's a feasible option for your company. We'll analyze:
- 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 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 buy 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 dependable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict guidelines for the management of employee stock ownership plans. For example, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the option to ask for the employer to redeem 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 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 develops and matures, so will its impact on your company. ESOP advisors can plan for these changes and adapt to them in real time, facilitating your plan to stay workable, in accordance with regulations, and profitable.
- Employee communication and education — Our ESOP advisors offer collective workshops and one-on-one meetings with your employees so they can maximize the benefits from your ESOP. With an ESOP advisor from Correct Capital, your employees won't just get a portion of your company, but they'll feel like they're obtaining ownership of their economic well-being 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 several factors we point to that make us unique from other financial consulting companies in Chesterfield, MO, and throughout the U.S.:
- We know retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a variety of industries, including for construction companies and contractors. As we work with both businesses and individuals and families when managing retirement plans, we're well-prepared to understand the requirements of each and develop a plan that meets the needs of both, as well as those of your stockholders.
- As independent fiduciary advisors, we are legally and morally bound to do what's in the utmost benefit 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 increasing your and your employees' monetary well-being.
Other services we offer in Chesterfield, MO:
Call Correct Capital to Speak With an ESOP Advisor in Chesterfield, MO Today
If you're interested in learning more about ESOPs or desire to commence the process of setting one up for your Chesterfield, MO business, contact a Correct Capital ESOP advisor now. Let us do what we do best so you can prioritize on what you care about most: positioning yourself, your business, and your employees up for success. Contact with one of our Chesterfield, MO ESOP advisors now at 877-930-4015 or contact us online.
