ESOP advisor in Creve Coeur, MO. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement benefit for employees in a variety of sectors in Creve Coeur, MO. They offer business owners a chance to move on from their company while greatly reducing taxes on the sale, and offer employees a qualified retirement plan that increases their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Creve Coeur, MO business owners can do alone. Correct Capital's seasoned and savvy ESOP advisors help businesses of all sizes, in Creve Coeur, MO and around the United States, establish tailored retirement plans that benefit themselves, their employees, and their profit.
If you're in search of an experienced financial partner in Creve Coeur, MO who shares your goals of setting up your company and employees for sustained success, call Correct Capital at 877-930-4015, contact us online, or schedule an appointment with one of our financial advisors right away.
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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 they work for, rather than savings or investments in other companies such as in a 401(k). ESOPs are fully funded by the employer, and often times shares offered to employees are not controlling 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 in the hiring process, and allow business owners to set up a succession plan while retaining 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 disperse that tax hit instead of needing to pay taxes right away. 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 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
- Improve employee motivation and productivity
- Boost employee retention and loyalty
- Ease succession planning and business continuity
- Keep control while arranging or easing into retirement
- Raise personal liquidity of owners, but still keep control of the company
- Preserve your business' legacy and culture
What About KSOPs?
A KSOP is a similar type of plan that is a mix between an ESOP and a 401(k). Ownership shares are offered to employees as in an ESOP, employees can add their own money to obtain additional shares through payroll deductions, or the company can match employee contributions with shares instead of cash.
Setting up a stock ownership plan doesn't have to exclude your employees from more 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 Creve Coeur, MO ESOP advisors and retirement consultants of Correct Capital can aid you find the right plans for your business.
How Our Creve Coeur, MO ESOP Advisors Can Help
Whether you're stepping from ownership of your company or are interested in an ESOP's other benefits, you'll need a knowledgeable Creve Coeur, MO ESOP advisory firm by your side 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 sell 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, allowing you to keep 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 the proceeds in qualified replacement securities or QRP. Taxes would be owed until the taxpayer has a sale of the QRP. An ESOP advisor can guarantee you obtain the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll develop and execute 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 enhance the benefits they provide. We'll evaluate your needs, evaluate several ESOP options, and recommend a tailored ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it's a good idea, 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 comprehend their needs and work together with them to discover the optimal tax-advantaged retirement plans for their business. For clients looking at an ESOP, part of that means performing a feasibility analysis to establish if it's a viable 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 what they need from their retirement plan
- 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 collaborate 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 purchase stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Creve Coeur, MO can help you establish your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the oversight of employee stock ownership plans. For example, 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 redeem them at current market price.
- 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 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 respond to them in real time, enabling your plan to stay viable, compliant, and beneficial.
- Employee communication and education — Our ESOP advisors offer group meetings and personalized 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 attain a share of your company, but they'll feel like they're gaining ownership of their economic well-being and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Creve Coeur, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners arrange retirement plans and succession plans for their businesses. There are numerous factors we believe set us apart from other financial consulting companies in Creve Coeur, MO, and across the country:
- We're experienced in retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a wide range of industries, including for construction companies and contractors. As we work with both businesses and individuals and families to assist in setting up retirement plans, we're ideally suited to understand the needs of each and create a plan that satisfies the needs of both, as well as those of your stockholders.
- As independent fiduciary advisors, we are lawfully and ethically bound to do what's in the utmost benefit of you, your employees, and your company. We aim to forge long-term relationships with our clients founded on trust and the mutual goal of growing your and your employees' financial prosperity.
Other services we offer in Creve Coeur, MO:
Call Correct Capital to Speak With an ESOP Advisor in Creve Coeur, MO Today
If you're interested in learning more about ESOPs or aspire to initiate the process of setting one up for your Creve Coeur, MO business, contact a Correct Capital ESOP advisor now. Let us do what we do best so you can focus on what you care about most: positioning yourself, your business, and your employees up for success. Get in touch with one of our Creve Coeur, MO ESOP advisors now at 877-930-4015 or contact us online.