ESOP advisor in Edwardsville, IL. Employee stock ownership plans (ESOPs) are becoming a more and more well-liked retirement plan for employees in various industries in Edwardsville, IL. They offer business owners an opportunity to move on from their company while substantially 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 Edwardsville, IL business owners can do alone. Correct Capital's knowledgeable and savvy ESOP advisors help businesses of all sizes, in Edwardsville, IL and around the U.S., design tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're in search of a trustworthy financial partner in Edwardsville, IL who shares your goals of creating 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.
About Employee Stock Ownership Plans (ESOPs)
An ESOP is a tax-advantaged retirement plan where employees receive shares 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 voting shares, meaning control of the company stays with ownership and other executives. They offer superb incentives to employees while providing businesses with a better value proposition to employees, and allow business owners to set up a succession plan while maintaining control. When they retire, most employees sell the stock at market value value.
Perhaps even more importantly, by handing over part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to spread out that tax hit instead of needing to pay taxes at once. In many cases, ESOPs are a succession plan that keeps the most amount of money achievable 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 free from federal income taxes
- Align the goals of employees and stockholders
- Provide a higher value proposition when hiring
- Boost employee motivation and productivity
- Boost employee retention and loyalty
- Enable succession planning and business continuity
- Retain control while organizing or easing into retirement
- Boost 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 similar type of 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 rather than 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 obtain the benefits of both. The experienced Edwardsville, IL ESOP advisors and retirement consultants of Correct Capital can support you find the right plans for your business.
What Our Edwardsville, IL ESOP Advisors Do for You
Whether you're motivated by a succession plan, employee incentives, or any other of ESOPs' benefits, you'll need an experienced Edwardsville, IL ESOP advisory firm to partner with 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 transfer 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 keep more of the profit. To defer 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 disposition of the QRP. An ESOP advisor can assure you obtain the most tax benefit from your ESOP.
- Personalize 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 innovative with retirement plan offerings to enhance the advantages they provide. We'll examine your needs, evaluate several ESOP options, and recommend a personalized ESOP that meets legal requirements and is aimed at maximizing benefits. If we believe it'll work, we may also advise combining an ESOP with a 401(k) or alternative retirement plans to additionally increase benefits, yet retain 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 qualified retirement plans for their business. For clients looking at an ESOP, part of that means carrying out a feasibility analysis to establish if it's a workable option for your company. We'll examine:
- Cash flow, debts, and overall financial health
- Ownership structure to understand the implications of 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 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 buy stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Edwardsville, IL 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 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 fair market value.
- 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 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 develops and matures, so will its implications for your company. ESOP advisors can plan for these changes and adapt to them in real time, facilitating your plan to stay viable, in accordance with regulations, and profitable.
- Employee communication and education — Our ESOP advisors offer collective workshops and one-on-one meetings with your employees so they can maximize the benefits from your employee stock ownership plan. With an ESOP advisor from Correct Capital, your employees won't just acquire 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 Edwardsville, IL
Correct Capital is an independent advisory firm that specializes in helping business owners arrange retirement plans and succession plans for their businesses. There are several factors we point to that distinguish us from other investment advisory agencies in Edwardsville, IL, and throughout the United States:
- 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 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 well-prepared to understand the needs of each and establish a plan that satisfies the needs of both, as well as those of your stockholders.
- Our award-winning Edwardsville, IL financial advisory team is composed 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 best serve each client distinctively.
- As independent fiduciary advisors, we are legally and ethically bound to do what's in the optimal interest of you, your employees, and your company. We strive to forge long-term relationships with our clients founded on trust and the mutual goal of increasing your and your employees' monetary well-being.
Other services we offer in Edwardsville, IL:
- Succession Planning
- Fiduciary Financial Advisor
- 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
Call Correct Capital to Speak With an ESOP Advisor in Edwardsville, IL Today
If you're interested in learning more about ESOPs or aspire to initiate the process of setting one up for your Edwardsville, IL business, reach out to a Correct Capital ESOP advisor now. Let us do what we do best so you can prioritize on what you care about most: setting yourself, your business, and your employees up for prosperity. Contact with one of our Edwardsville, IL ESOP advisors now at 314-930-4015 or contact us online.