ESOP advisor in Crestwood, MO. Employee stock ownership plans (ESOPs) are becoming a more and more common retirement benefit for employees in various industries in Crestwood, MO. They offer business owners a chance to step away from 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 Crestwood, MO business owners can do by themselves. Correct Capital's seasoned and savvy ESOP advisors help businesses of all sizes, in Crestwood, MO and around the United States, develop tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're seeking an experienced financial partner in Crestwood, MO who shares your goals of creating 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 at this moment.
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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 fully funded by the employer, and often times shares offered to employees are not governing shares, meaning control of the company stays with the C-suite. They offer superb incentives to employees while providing businesses with an enhanced value proposition in the hiring process, and allow business owners to set up a succession plan while retaining control. When they retire, most employees sell the stock at stock market value.
Perhaps most importantly, by transferring part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to distribute that tax hit instead of having to pay taxes immediately. In many cases, ESOPs are a succession plan that keeps the most amount of money attainable 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
- Offer a higher value proposition when hiring
- Increase employee motivation and productivity
- Boost employee retention and loyalty
- Facilitate succession planning and business continuity
- Maintain control while organizing or easing into retirement
- Amplify 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 add their own money to acquire additional shares 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, incorporating an ESOP or KSOP to a more traditional retirement plan allows you to get the benefits of both. The experienced Crestwood, MO ESOP advisors and retirement consultants of Correct Capital can help you find the best retirement plan for you, your company, and your employees.
What Our Crestwood, MO ESOP Advisors Do for You
Whether you're moving on from ownership of your company or are interested in an ESOP's other benefits, you'll need an experienced Crestwood, MO ESOP advisory firm in your corner to reap the most benefits 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 other securities to postpone capital gains taxes on the sales, allowing you to retain more of the sales proceeds for various purposes. 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 sale 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 design and set up an ESOP that works best for you and your distinctive company. We like to test ourselves and our clients to get imaginative with retirement plan offerings to enhance the advantages they provide. We'll evaluate your needs, evaluate different ESOP options, and suggest a tailored ESOP that meets legal requirements and is aimed at maximizing benefits. If it makes sense, we may also advise combining an ESOP with a 401(k) or alternative retirement plans to additionally increase 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 best qualified retirement plans for their business. For clients looking at an ESOP, part of that means performing a feasibility analysis to ascertain if it's a workable 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 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 Crestwood, MO can help you set up your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict guidelines for the oversight of ESOPs. 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 repurchase them at market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on seniority of service. Usually, that means ownership of the company is sold 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 progresses 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 profitable.
- Employee communication and education — Our ESOP advisors offer collective workshops 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 get a share of your company, but they'll feel like they're achieving ownership of their financial stability and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Crestwood, MO
Correct Capital is an independent advisory firm that specializes in helping business owners create retirement plans and succession plans for their enterprises. There are numerous factors we point to that make us unique from other financial advisory firms in Crestwood, MO, and across the U.S.:
- We know 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 requirements of each and establish a plan that meets the needs of both, as well as those of your stockholders.
- 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 founded on trust and the shared goal of increasing your and your employees' monetary well-being.
Other services we offer in Crestwood, MO:
Call Correct Capital to Speak With an ESOP Advisor in Crestwood, MO Today
If you're interested in learning more about ESOPs or wish to start the process of setting one up for your Crestwood, MO business, get in touch with a Correct Capital ESOP advisor now. Let us do what we do best so you can focus on what you care about most: setting yourself, your business, and your employees up for prosperity. Reach out with one of our Crestwood, MO ESOP advisors now at 877-930-4015 or contact us online.
