ESOP advisor in Clayton, MO. Employee stock ownership plans (ESOPs) have become an increasingly popular retirement plan for employees in various industries in Clayton, MO. They offer business owners an opportunity to step away from their company while substantially reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that increases their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most Clayton, MO business owners can do without professional help. Correct Capital's knowledgeable and savvy ESOP advisors help businesses of all sizes, in Clayton, 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 Clayton, 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 a consultation with one of our financial advisors immediately.
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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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What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a qualified retirement plan where employees receive shares of the company they work for, rather than savings accounts 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 voting shares, meaning control of the company stays with the C-suite. They offer excellent 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. Upon reaching retirement, most employees sell the stock at marketplace value.
Perhaps most importantly, by handing over part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to spread out 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)
- Further 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
- Enhance employee motivation and productivity
- Improve employee retention and loyalty
- Simplify succession planning and business continuity
- Maintain control while organizing or easing into retirement
- Increase personal liquidity of owners, but still hold on to control of the company
- Carry on 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 add their own money to acquire additional shares 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 more 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 Clayton, MO ESOP advisors and retirement consultants of Correct Capital can aid you find the right plans for your business.
What Our Clayton, 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 an experienced Clayton, MO ESOP advisory firm in your corner 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 can reinvest the proceeds in alternative securities to postpone capital gains taxes on the sales, allowing you to retain more of the profit. 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 sale of the QRP. An ESOP advisor can ensure you receive the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll create and execute an ESOP suited specifically to you and your company. We like to challenge ourselves and our clients to get creative with retirement plan offerings to enhance the benefits they offer. We'll examine your needs, evaluate several ESOP options, and suggest a tailored 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 grasp their needs and work together with them to identify the optimal qualified 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 the implications of 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 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 work 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 purchase stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Clayton, MO can help you establish your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the oversight of retirement plans. For instance, when employees participating in an ESOP 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 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 respond to them in real time, allowing your plan to stay feasible, in accordance with regulations, and profitable.
- Employee communication and education — Our ESOP advisors offer group sessions and one-on-one meetings with your employees so they can optimize the advantages from your ESOP. 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 Clayton, MO
Correct Capital is an independent advisory firm that specializes in helping business owners create retirement plans and succession plans for their businesses. There are several factors we believe make us unique from other financial advisory firms in Clayton, MO, and all over the U.S.:
- We know retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a range of sectors, 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 demands of each and establish a plan that satisfies 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 optimal interest 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 expanding your and your employees' wealth.
Other services we offer in Clayton, MO:
Call Correct Capital to Speak With an ESOP Advisor in Clayton, MO Today
If you're interested in learning more about ESOPs or aspire to initiate the process of setting one up for your Clayton, MO business, get in touch with a Correct Capital ESOP advisor today. Let us do what we do best so you can concentrate on what you care about most: establishing yourself, your business, and your employees up for success. Contact with one of our Clayton, MO ESOP advisors today at 877-930-4015 or contact us online.
