ESOP advisor in Cottleville, MO. Employee stock ownership plans (ESOPs) are becoming a more and more well-liked retirement benefit for employees in various industries in Cottleville, MO. They offer business owners an opportunity to move on from their company while considerably reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that builds their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most Cottleville, MO business owners can do by themselves. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in Cottleville, MO and around the country, establish tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're looking for a trustworthy financial partner in Cottleville, MO who shares your goals of creating 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 today.
What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a tax-advantaged retirement plan where employees receive stock of the company that employs them, rather than savings 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 governing shares, meaning control of the company stays with ownership and other executives. They offer fantastic incentives to employees while providing businesses with a superior value proposition to employees, and allow business owners to set up a succession plan while retaining control. Upon reaching retirement, most employees sell the stock at market value value.
Perhaps even more importantly, 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 immediately. In many cases, ESOPs are a succession plan that keeps the most amount of money achievable 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 eventually 100% owned as an S-Corp by the ESOP, it's exempt from federal income taxes
- Align the goals of employees and stockholders
- Provide a higher value proposition when hiring
- Enhance employee motivation and productivity
- Boost employee retention and loyalty
- Facilitate succession planning and business continuity
- Maintain control while arranging 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 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 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 attain the benefits of both. The experienced Cottleville, MO ESOP advisors and retirement consultants of Correct Capital can help you find the right plans for your business.
What Our Cottleville, 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 Cottleville, 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 have the option to reinvest the proceeds in different securities to defer capital gains taxes on the sales, permitting you to retain more of the profit. To postpone 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 that money 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 create and set up an ESOP that works best for you and your unique company. We like to challenge ourselves and our clients to get imaginative with retirement plan offerings to optimize the advantages they offer. We'll assess your needs, assess various ESOP options, and suggest a customized ESOP that meets legal requirements and is aimed at maximizing benefits. If we believe it'll work, 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 comprehend their needs and work together with them to find the optimal tax-advantaged 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 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 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, lawyers, and a trustee to buy stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Cottleville, 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 administration of ESOPs. 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 require the employer to repurchase them at current market price.
- 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 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 implications for your company. ESOP advisors can plan for these changes and react to them in real time, enabling your plan to stay workable, compliant, and advantageous.
- 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 employee stock ownership plan. With an ESOP advisor from Correct Capital, your employees won't just get partial ownership of your company, but they'll feel like they're achieving ownership of their economic well-being and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Cottleville, 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 Cottleville, MO, and all over the nation:
- 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 know retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a variety of sectors, including for construction companies and contractors. As we work with both businesses and individuals and families to support in setting up retirement plans, we're ideally suited to understand the requirements of each and develop a plan that satisfies the needs of both, as well as those of your stockholders.
- Our award-winning Cottleville, MO financial advisory team is composed of a diverse 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 optimally assist each client uniquely.
- As independent fiduciary advisors, we are legally and ethically bound to do what's in the best interest of you, your employees, and your company. We strive to establish long-term relationships with our clients grounded in trust and the common goal of expanding your and your employees' financial prosperity.
Other services we offer in Cottleville, 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 Cottleville, MO Today
If you're interested in learning more about ESOPs or desire to start the process of setting one up for your Cottleville, MO business, reach out to a Correct Capital ESOP advisor today. Let us do what we do best so you can concentrate on what you care about most: positioning yourself, your business, and your employees up for success. Get in touch with one of our Cottleville, MO ESOP advisors today at 877-930-4015 or contact us online.
