ESOP advisor in Clayton, MO. Employee stock ownership plans (ESOPs) are becoming a more and more well-liked retirement benefit for employees in a variety of sectors in Clayton, MO. They offer business owners a chance to step away from their company while substantially 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 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, develop tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're seeking an experienced financial partner in Clayton, MO who shares your goals of setting up your company and employees for prolonged success, call Correct Capital at 877-930-4015, contact us online, or schedule a consultation 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 shares of the company that employs them, rather than savings accounts or investments in other companies as in a typical retirement plan. ESOPs are 100% company funded, and often times shares offered to employees are not decision-making 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 in the hiring process, and allow business owners to set up a succession plan while maintaining control. Upon reaching retirement, most employees sell the stock at stock market value.
Of special interest to business owners, by handing over 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 having to pay taxes right away. In many cases, ESOPs are a succession plan that keeps the most amount of money possible 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 eventually 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
- Increase employee motivation and productivity
- Improve employee retention and loyalty
- Simplify succession planning and business continuity
- Maintain control while preparing or easing into retirement
- Boost personal liquidity of owners, but still retain control of the company
- Carry on 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 given to employees as in an ESOP, employees can deposit their own money to buy 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, adding 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 support you find the best retirement plan for you, your business, and your employees.
How Our Clayton, 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 Clayton, 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 alternative securities to postpone capital gains taxes on the sales, permitting you to keep more of the sales proceeds for different 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 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 set up an ESOP that works best for you and your distinctive company. We like to push ourselves and our clients to get creative with retirement plan offerings to optimize the advantages they provide. We'll examine your needs, analyze several ESOP options, and propose a tailored ESOP that meets legal requirements and is aimed at optimizing benefits. If it makes sense, we may also recommend combining an ESOP with a 401(k) or different 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 discover the optimal tax-advantaged retirement plans for their business. For clients interested in an ESOP, part of that means carrying out a feasibility analysis to establish if it's a viable 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 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 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 Clayton, 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 oversight of retirement plans. For instance, when individuals enrolled in an employee stock ownership plan at a closely held employer receive company stock in an ESOP distribution, they have the right to ask for the employer to buy back 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 passed 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 evolves and matures, so will its implications for your company. ESOP advisors can plan for these changes and adapt to them in real time, enabling your plan to stay viable, in accordance with regulations, and beneficial.
- Employee communication and education — Our ESOP advisors offer group sessions and personalized 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 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 Clayton, MO
Correct Capital is an independent advisory firm that specializes in helping business owners arrange retirement plans and succession plans for their enterprises. There are multiple factors we believe set us apart from other financial consulting companies in Clayton, 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 variety of industries, 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 perfectly positioned to understand the needs of each and create a plan that fulfills the needs of both, as well as those of your stockholders.
- Our award-winning Clayton, MO financial advisory team is made up 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 best serve each client distinctively.
- 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 mutual goal of increasing your and your employees' monetary well-being.
Other services we offer in Clayton, 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
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 commence the process of setting one up for your Clayton, MO business, contact a Correct Capital ESOP advisor now. 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. Get in touch with one of our Clayton, MO ESOP advisors now at 877-930-4015 or contact us online.
