ESOP advisor in Cottleville, MO. Employee stock ownership plans (ESOPs) have become an increasingly common retirement plan for employees in a variety of sectors in Cottleville, MO. They offer business owners an opportunity to exit their company while greatly reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that builds their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Cottleville, MO business owners can do without professional help. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in Cottleville, MO and around the U.S., develop tailored retirement plans that benefit themselves, their employees, and their profit.
If you're looking for an experienced financial partner in Cottleville, MO who shares your goals of building 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 right away.
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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 tax-advantaged retirement plan where employees receive shares of the company that employs them, rather than savings funds 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 decision-making shares, meaning control of the company stays with ownership and other executives. They offer superb incentives to employees while providing businesses with a superior 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 selling part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to allocate the tax consequences of the sale instead of needing to pay taxes at once. 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 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
- Boost employee motivation and productivity
- Enhance employee retention and loyalty
- Ease succession planning and business continuity
- Maintain control while planning or easing into retirement
- Raise personal liquidity of owners, but still hold on to control of the company
- Preserve 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 provided to employees as in an ESOP, employees can contribute their own money to buy 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 more diverse investments. In fact, adding an ESOP or KSOP to a more traditional retirement plan allows you to get the benefits of both. The experienced Cottleville, MO ESOP advisors and retirement consultants of Correct Capital can support 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 a knowledgeable Cottleville, MO ESOP advisory firm by your side to get the most out of your plan. When you work with Correct Capital, we:
- Reduce your tax liability as much as possible — When you sell your ownership shares to an ESOP, you can reinvest the proceeds in different securities to postpone capital gains taxes on the sales, permitting you to keep more of the profit. To defer 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 payable until the taxpayer has a sale of the QRP. An ESOP advisor can ensure you get the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll develop and implement an ESOP that works best for you and your unique company. We like to test ourselves and our clients to get innovative with retirement plan offerings to maximize the benefits they offer. We'll assess your needs, evaluate various ESOP options, and suggest a tailored ESOP that meets legal requirements and is aimed at maximizing benefits. If it makes sense, we may also recommend combining an ESOP with a 401(k) or different retirement plans to further boost benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to understand their needs and work together with them to identify the optimal tax-advantaged retirement plans for their company. 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 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 assess 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 partner 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 Cottleville, MO can help you arrange your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict guidelines 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 demand the employer to repurchase 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 sold 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 evolves and matures, so will its implications for your company. ESOP advisors can plan for these changes and react to them in real time, allowing your plan to stay feasible, in accordance with regulations, and advantageous.
- Employee communication and education — Our ESOP advisors offer group sessions and personalized meetings with your employees so they can get the most from your ESOP. With an ESOP advisor from Correct Capital, your employees won't just get a share of your company, but they'll feel like they're achieving ownership of their economic well-being and future.
Why Choose Correct Capital as Your ESOP Advisor in Cottleville, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners create retirement plans and succession plans for their enterprises. There are several factors we point to that set us apart from other financial consulting companies in Cottleville, MO, and across the U.S.:
- We know retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a range of industries, 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 well-prepared to understand the needs 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 lawfully and morally bound to do what's in the best interest of you, your employees, and your company. We strive to forge long-term relationships with our clients based on trust and the mutual goal of growing your and your employees' wealth.
Other services we offer in Cottleville, MO:
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 initiate 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 focus on what you value most: establishing yourself, your business, and your employees up for achievement. Get in touch with one of our Cottleville, MO ESOP advisors immediately at 877-930-4015 or contact us online.
