ESOP advisor in Columbia, IL. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement benefit for employees in a variety of sectors in Columbia, IL. They offer business owners an opportunity to exit their company while significantly reducing taxes on the sale, and offer employees a qualified retirement plan that increases their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most Columbia, IL business owners can do without professional help. Correct Capital's seasoned and savvy ESOP advisors help businesses of all sizes, in Columbia, IL and around the nation, establish tailored retirement plans that benefit themselves, their employees, and their profit.
If you're looking for a trustworthy financial partner in Columbia, IL 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 a consultation with one of our financial advisors immediately.
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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 such as in a 401(k). ESOPs are 100% company funded, and often times shares offered to employees are not governing shares, meaning control of the company stays with the C-suite. They offer great incentives to employees while providing businesses with a superior value proposition to employees, and allow business owners to set up a succession plan while preserving control. When they retire, most employees sell the stock at marketplace 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 disperse that tax hit instead of being required to pay taxes right away. In many cases, ESOPs are a transition plan that keeps the most amount of money feasible 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
- Boost employee retention and loyalty
- Enable succession planning and business continuity
- Maintain control while organizing or easing into retirement
- Increase personal liquidity of owners, but still keep control of the company
- Carry on your business' legacy and culture
What About KSOPs?
A KSOP is a similar type of plan that is a combination of an ESOP and a 401(k). Ownership shares are extended to employees as in an ESOP, employees can contribute their own money to acquire additional stock 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 the risk tolerance that comes with diverse investments. In fact, incorporating an ESOP or KSOP to a more traditional retirement plan allows you to get the benefits of both. The experienced Columbia, IL ESOP advisors and retirement consultants of Correct Capital can help you find the right plans for your business.
What Our Columbia, IL ESOP Advisors Do for You
Whether you're stepping from control of your company or are interested in an ESOP's other benefits, you'll need a knowledgeable Columbia, IL 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 transfer your ownership shares to an ESOP, you have the option to reinvest the proceeds in alternative securities to postpone capital gains taxes on the sales, allowing 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 the proceeds in qualified replacement securities or QRP. Taxes would be owed until the taxpayer has a disposition of the QRP. An ESOP advisor can ensure 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 suited specifically to you and your company. We like to push ourselves and our clients to get creative with retirement plan offerings to optimize the benefits they provide. We'll evaluate your needs, assess several ESOP options, and recommend 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 further augment benefits, yet retain 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 determine if it's a viable option for your company. We'll look at:
- 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 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 CPAs, attorneys, and a trustee to purchase stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Columbia, IL can help you arrange your ESOP team with dependable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict requirements for the management of employee stock ownership plans. 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 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. Usually, 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 develops and matures, so will its impact on your company. ESOP advisors can plan for these changes and react to them in real time, allowing your plan to stay viable, in accordance with regulations, 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 acquire partial ownership of your company, but they'll feel like they're obtaining ownership of their financial health and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Columbia, IL
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 point to that make us unique from other financial consulting companies in Columbia, IL, and across the United States:
- We're experienced in 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 well-prepared to understand the demands of each and establish a plan that satisfies the necessities of both, as well as those of your stockholders.
- As independent fiduciary advisors, we are lawfully and morally bound to do what's in the utmost benefit of you, your employees, and your company. We endeavor to forge long-term relationships with our clients based on trust and the common goal of expanding your and your employees' financial prosperity.
Other services we offer in Columbia, IL:
Call Correct Capital to Speak With an ESOP Advisor in Columbia, IL Today
If you're interested in learning more about ESOPs or wish to start the process of setting one up for your Columbia, IL 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 achievement. Reach out with one of our Columbia, IL ESOP advisors now at 877-930-4015 or contact us online.
