ESOP advisor in Des Peres, MO. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement plan for employees in a variety of sectors in Des Peres, MO. They offer business owners a chance to transition from their company while greatly reducing taxes on the sale, and offer employees a qualified retirement plan that increases their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most Des Peres, MO business owners can do without professional help. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in Des Peres, MO and around the country, develop tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're looking for a trustworthy financial partner in Des Peres, 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 an appointment with one of our financial advisors today.
What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a qualified retirement plan where employees receive stock of the company they work for, 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 controlling shares, meaning control of the company stays with ownership and other executives. They offer superb incentives to employees while providing businesses with an improved 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 market value.
Perhaps most importantly, by transferring part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to spread out that tax hit instead of being required to pay taxes right away. In many cases, ESOPs are a succession plan that keeps the most amount of money feasible 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)
- Additional 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
- Present a higher value proposition when hiring
- Increase employee motivation and productivity
- Boost employee retention and loyalty
- Facilitate succession planning and business continuity
- Retain control while arranging or easing into retirement
- Increase personal liquidity of owners, but still hold on to 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 extended to employees as in an ESOP, employees can deposit 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, adding an ESOP or KSOP to a more traditional retirement plan allows you to get the benefits of both. The experienced Des Peres, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the best retirement plan for you, your company, and your employees.
How Our Des Peres, 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 Des Peres, MO ESOP advisory firm to partner with 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 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 the proceeds 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 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 test ourselves and our clients to get imaginative with retirement plan offerings to enhance the benefits they offer. We'll evaluate your needs, evaluate several ESOP options, and suggest a customized ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it'll work, we may also suggest combining an ESOP with a 401(k) or other retirement plans to additionally boost benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to grasp their needs and collaborate with them to discover the optimal tax-advantaged retirement plans for their business. For clients interested in an ESOP, part of that means conducting a feasibility analysis to determine if it's a feasible 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 determine 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 acquire stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Des Peres, MO can help you set up your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the oversight of ESOPs. For example, when employees participating in an ESOP at a closely held employer receive company stock in an ESOP distribution, they have the option to require the employer to repurchase them at fair market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on duration of service. Most of the time, that means ownership of the company is sold to the ESOP in increments. 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 impact on your company. ESOP advisors can plan for these changes and respond to them in real time, facilitating your plan to stay feasible, compliant, and profitable.
- Employee communication and education — Our ESOP advisors offer collective workshops and one-on-one meetings with your employees so they can get the most from your employee stock ownership plan. With an ESOP advisor from Correct Capital, your employees won't just attain partial ownership of your company, but they'll feel like they're achieving ownership of their financial health and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Des Peres, MO
Correct Capital is an independent advisory firm that specializes in helping business owners arrange retirement plans and succession plans for their companies. There are several factors we believe distinguish us from other financial advisory firms in Des Peres, MO, and all over the country:
- We know 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 support in setting up retirement plans, we're well-prepared to understand the demands of each and create a plan that fulfills the needs 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 utmost benefit of you, your employees, and your company. We endeavor to form long-term relationships with our clients founded on trust and the shared goal of expanding your and your employees' financial prosperity.
Other services we offer in Des Peres, MO:
Call Correct Capital to Speak With an ESOP Advisor in Des Peres, MO Today
If you're interested in learning more about ESOPs or desire to start the process of setting one up for your Des Peres, MO business, reach out to a Correct Capital ESOP advisor at this moment. Let us do what we do best so you can concentrate on what you care about most: establishing yourself, your business, and your employees up for success. Get in touch with one of our Des Peres, MO ESOP advisors immediately at 877-930-4015 or contact us online.
