ESOP advisor in Ellisville, MO. Employee stock ownership plans (ESOPs) have become an increasingly popular retirement plan for employees in various industries in Ellisville, MO. They offer business owners an opportunity to move on from 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 Ellisville, MO business owners can do without professional help. Correct Capital's proficient and savvy ESOP advisors help businesses of all sizes, in Ellisville, MO and around the U.S., establish tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're looking for a trustworthy financial partner in Ellisville, MO who shares your goals of establishing your company and employees for long-term success, call Correct Capital at 314-930-4015, contact us online, or schedule a consultation with one of our financial advisors now.
What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a tax-advantaged retirement plan where employees receive shares of the company that employs them, rather than savings funds 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 voting shares, meaning control of the company stays with ownership and other executives. They offer excellent incentives to employees while providing businesses with an improved value proposition to employees, and allow business owners to set up a succession plan while maintaining control. Upon reaching retirement, most employees sell the stock at marketplace value.
Perhaps even more importantly, by handing over part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to disperse the tax consequences of the sale 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
- Provide a higher value proposition when hiring
- Increase employee motivation and productivity
- Improve employee retention and loyalty
- Enable succession planning and business continuity
- Retain control while organizing or easing into retirement
- Amplify 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 tax-advantaged plan that is a mix between an ESOP and a 401(k). Ownership shares are extended to employees as in an ESOP, employees can contribute their own money to buy 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, introducing an ESOP or KSOP to a more traditional retirement plan allows you to attain the benefits of both. The experienced Ellisville, MO ESOP advisors and retirement consultants of Correct Capital can help you find the right plans for your business.
What Our Ellisville, MO ESOP Advisors Do for You
Whether you're moving on from control of your company or are interested in an ESOP's other benefits, you'll need an experienced Ellisville, MO ESOP advisory firm in your corner 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, allowing you to keep more of the sales proceeds for other purposes. To postpone capital gains taxes, your ESOP advisor can help you perform 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 guarantee you get the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll create and implement 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 optimize the benefits they provide. We'll assess your needs, evaluate several ESOP options, and suggest a customized ESOP that meets legal requirements and is aimed at optimizing benefits. If it makes sense, we may also suggest combining an ESOP with a 401(k) or other retirement plans to additionally increase 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 find the best tax-advantaged retirement plans for their company. For clients interested in an ESOP, part of that means conducting a feasibility analysis to determine 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 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, lawyers, and a trustee to acquire stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Ellisville, MO can help you set up your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict guidelines for the oversight of employee stock ownership plans. For instance, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the right to require the employer to buy back them at current market price.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on how long they've worked there. Usually, that means ownership of the company is passed 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 develops and matures, so will its impact on your company. ESOP advisors can plan for these changes and respond to them in real time, enabling your plan to stay feasible, in accordance with regulations, and profitable.
- Employee communication and education — Our ESOP advisors offer group sessions 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 obtaining ownership of their financial health and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Ellisville, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners create retirement plans and succession plans for their companies. There are several factors we point to that distinguish us from other investment advisory agencies in Ellisville, MO, and all over the U.S.:
- 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 know 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 when managing retirement plans, we're perfectly positioned to understand the needs of each and establish a plan that fulfills the needs of both, as well as those of your stockholders.
- Our award-winning Ellisville, 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 80 years of combined experience, we pool our collective talents and insights to optimally assist each client individually.
- 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 forge long-term relationships with our clients grounded in trust and the common goal of increasing your and your employees' monetary well-being.
Other services we offer in Ellisville, MO:
- 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 Ellisville, MO Today
If you're interested in learning more about ESOPs or aspire to start the process of setting one up for your Ellisville, MO business, get in touch with a Correct Capital ESOP advisor today. Let us do what we do best so you can prioritize on what you value most: setting yourself, your business, and your employees up for achievement. Reach out with one of our Ellisville, MO ESOP advisors immediately at 314-930-4015 or contact us online.