ESOP advisor in Creve Coeur, MO. Employee stock ownership plans (ESOPs) have become an increasingly common retirement plan for employees in a variety of sectors in Creve Coeur, MO. They offer business owners an opportunity to exit their company while substantially reducing taxes on the sale, and offer employees a tax-advantaged 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 without professional help. Correct Capital's seasoned and savvy ESOP advisors help businesses of all sizes, in Creve Coeur, MO and around the United States, create tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're seeking a trustworthy financial partner in Creve Coeur, MO who shares your goals of building your company and employees for enduring success, call Correct Capital at 314-930-4015, contact us online, or schedule an appointment with one of our financial advisors at this moment.
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 such as in a 401(k). 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 the C-suite. They offer excellent incentives to employees while providing businesses with a better value proposition in the hiring process, and allow business owners to set up a succession plan while preserving control. Upon reaching retirement, most employees sell the stock at market value value.
Of special interest to business owners, by transferring part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to distribute the tax consequences of the sale instead of being required to pay taxes at once. In many cases, ESOPs are a succession plan that keeps the most amount of money feasible 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)
- 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 free from federal income taxes
- Align the goals of employees and stockholders
- Provide a higher value proposition when hiring
- Improve employee motivation and productivity
- Enhance employee retention and loyalty
- Facilitate succession planning and business continuity
- Keep control while arranging or easing into retirement
- Raise personal liquidity of owners, but still retain control of the company
- Preserve 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 obtain additional stock through payroll deductions, or the company can match employee contributions with stock 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 get the benefits of both. The experienced Creve Coeur, MO ESOP advisors and retirement consultants of Correct Capital can support you find the best retirement plan for you, your company, and your employees.
How Our Creve Coeur, MO ESOP Advisors Can Help
Whether you're motivated by a succession plan, employee incentives, or any other of ESOPs' benefits, you'll need a knowledgeable Creve Coeur, MO ESOP advisory firm to partner with to get the most out 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 other 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 payable until the taxpayer has a sale of the QRP. An ESOP advisor can assure you obtain the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll design and set up an ESOP suited specifically to you and your company. We like to push ourselves and our clients to get innovative with retirement plan offerings to enhance the advantages they provide. We'll examine your needs, evaluate different ESOP options, and propose a tailored ESOP that meets legal requirements and is aimed at maximizing benefits. If it makes sense, we may also suggest combining an ESOP with a 401(k) or different retirement plans to further 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 qualified retirement plans for their company. For clients interested in an ESOP, part of that means performing a feasibility analysis to establish if it's a workable 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 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 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 CPAs, 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 requirements for the administration of employee stock ownership plans. 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 redeem them at current market price.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on duration 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 impact on your company. ESOP advisors can plan for these changes and react to them in real time, allowing your plan to stay workable, in accordance with regulations, and beneficial.
- Employee communication and education — Our ESOP advisors offer group meetings and individual consultations with your employees so they can maximize the benefits from your retirement plan. With an ESOP advisor from Correct Capital, your employees won't just acquire a portion of your company, but they'll feel like they're obtaining ownership of their financial health 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 helping business owners create retirement plans and succession plans for their companies. There are numerous factors we believe distinguish us from other financial consulting companies in Creve Coeur, 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 wide range of sectors, including for construction companies and contractors. As we work with both businesses and individuals and families to aid in setting up retirement plans, we're ideally suited to understand the needs of each and establish a plan that meets the necessities of both, as well as those of your stockholders.
- Our award-winning Creve Coeur, MO financial advisory team is made up 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 eight decades of combined experience, we pool our collective talents and insights to effectively cater to each client uniquely.
- As independent fiduciary advisors, we are legally and morally bound to do what's in the best interest of you, your employees, and your company. We aim to forge long-term relationships with our clients based on trust and the shared goal of growing your and your employees' wealth.
Other services we offer in Creve Coeur, MO:
- 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
- Retirement Planning
- Rollover 401(k)
Call Correct Capital to Speak With an ESOP Advisor in Creve Coeur, MO Today
If you're interested in learning more about ESOPs or wish to initiate the process of setting one up for your Creve Coeur, 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: positioning yourself, your business, and your employees up for prosperity. Get in touch with one of our Creve Coeur, MO ESOP advisors now at 314-930-4015 or contact us online.