ESOP advisor in Concord, MO. Employee stock ownership plans (ESOPs) have become an increasingly popular retirement benefit for employees in various industries in Concord, MO. They offer business owners an opportunity to exit their company while considerably reducing taxes on the sale, and offer employees a qualified retirement plan that builds their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most Concord, MO business owners can do without professional help. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in Concord, MO and around the U.S., establish tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're seeking an experienced financial partner in Concord, MO who shares your goals of building your company and employees for sustained success, call Correct Capital at 314-930-4015, contact us online, or schedule a consultation with one of our financial advisors right away.
What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a qualified retirement plan where employees receive stock of the company that employs them, rather than savings accounts 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 ownership and other executives. 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 preserving control. Upon reaching retirement, 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 needing to pay taxes at once. In many cases, ESOPs are a succession plan that keeps the most amount of money achievable 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 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
- Provide a higher value proposition when hiring
- Boost employee motivation and productivity
- Enhance employee retention and loyalty
- Enable succession planning and business continuity
- Retain control while organizing or easing into retirement
- Boost 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 qualified plan that is a combination of an ESOP and a 401(k). Ownership shares are provided to employees as in an ESOP, employees can deposit their own money to purchase 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 the risk tolerance that comes with diverse investments. In fact, including an ESOP or KSOP to a more traditional retirement plan allows you to receive the benefits of both. The experienced Concord, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the right plans for your business.
How Our Concord, MO ESOP Advisors Can Help
Whether you're stepping from control of your company or are interested in an ESOP's other benefits, you'll need an experienced Concord, MO ESOP advisory firm to partner with to get the most out 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 have the option to reinvest the proceeds in alternative 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 carry out 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 assure you receive the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll develop and implement an ESOP suited specifically to you and your company. We like to test ourselves and our clients to get innovative with retirement plan offerings to optimize the benefits they provide. We'll evaluate your needs, analyze different ESOP options, and suggest 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 other retirement plans to further augment benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to grasp their needs and collaborate with them to discover the best qualified retirement plans for their company. For clients interested in an ESOP, part of that means performing a feasibility analysis to ascertain 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 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 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 Concord, MO can help you arrange your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict requirements for the management 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 demand the employer to repurchase them at fair market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on length 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 progresses and matures, so will its impact on your company. ESOP advisors can plan for these changes and react to them in real time, enabling your plan to stay workable, compliant, and profitable.
- Employee communication and education — Our ESOP advisors offer collective workshops and individual consultations with your employees so they can get the most from your ESOP. With an ESOP advisor from Correct Capital, your employees won't just attain a portion of your company, but they'll feel like they're gaining ownership of their financial stability and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Concord, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners arrange retirement plans and succession plans for their companies. There are several factors we point to that make us unique from other investment advisory agencies in Concord, MO, and throughout 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 range of sectors, including for construction companies and contractors. As we work with both businesses and individuals and families when managing retirement plans, we're ideally suited to understand the demands of each and establish a plan that fulfills the necessities of both, as well as those of your stockholders.
- Our award-winning Concord, 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 effectively cater to each client uniquely.
- 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 grounded in trust and the mutual goal of growing your and your employees' financial prosperity.
Other services we offer in Concord, 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 Concord, MO Today
If you're interested in learning more about ESOPs or wish to start the process of setting one up for your Concord, 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 prosperity. Reach out with one of our Concord, MO ESOP advisors now at 314-930-4015 or contact us online.