ESOP advisor in Eureka, MO. Employee stock ownership plans (ESOPs) have become an increasingly popular retirement plan for employees in various industries in Eureka, MO. They offer business owners a chance to pass the torch from their company while significantly reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that builds their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Eureka, MO business owners can do by themselves. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in Eureka, MO and around the United States, design tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're looking for an experienced financial partner in Eureka, MO who shares your goals of establishing your company and employees for enduring success, call Correct Capital at 877-930-4015, contact us online, or schedule a consultation with one of our financial advisors at this moment.
About Employee Stock Ownership Plans (ESOPs)
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 100% company funded, and often times shares offered to employees are not governing shares, meaning control of the company stays with ownership and other executives. They offer fantastic incentives to employees while providing businesses with an enhanced 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.
Perhaps most importantly, by selling part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to disperse that tax hit instead of having to pay taxes immediately. In many cases, ESOPs are a transition 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)
- Additional 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
- Present a higher value proposition when hiring
- Improve employee motivation and productivity
- Enhance employee retention and loyalty
- Ease succession planning and business continuity
- Retain control while arranging or easing into retirement
- Increase personal liquidity of owners, but still keep 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 given to employees as in an ESOP, employees can put in their own money to obtain additional shares through payroll deductions, or the company can match employee contributions with shares rather than cash.
Setting up a stock ownership plan doesn't have to exclude your employees from the risk tolerance that comes with 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 Eureka, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the best retirement plan for you, your company, and your employees.
What Our Eureka, MO ESOP Advisors Do for You
Whether you're motivated by a succession plan, employee incentives, or any other of ESOPs' benefits, you'll need a knowledgeable Eureka, MO ESOP advisory firm to partner with to get the most out of your plan. When you work with Correct Capital, we:
- Lower your tax liability as much as possible — When you sell your ownership shares to an ESOP, you can reinvest the proceeds in alternative securities to postpone capital gains taxes on the sales, permitting you to retain 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 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 assure you obtain the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll design and implement an ESOP that works best for you and your unique company. We like to test ourselves and our clients to get innovative with retirement plan offerings to optimize the benefits they provide. We'll assess your needs, assess different ESOP options, and suggest 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 further 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 discover the best tax-advantaged retirement plans for their business. For clients looking at an ESOP, part of that means conducting 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 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 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 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 Eureka, MO can help you establish your ESOP team with dependable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict guidelines for the administration of retirement plans. For example, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the option to ask for the employer to repurchase them at market value.
- 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 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, enabling your plan to stay viable, compliant, and advantageous.
- Employee communication and education — Our ESOP advisors offer group sessions and one-on-one meetings with your employees so they can optimize the advantages from your retirement plan. With an ESOP advisor from Correct Capital, your employees won't just attain a portion of your company, but they'll feel like they're gaining ownership of their economic well-being and future.
Why Choose Correct Capital as Your ESOP Advisor in Eureka, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners establish retirement plans and succession plans for their businesses. There are multiple factors we believe make us unique from other investment advisory agencies in Eureka, MO, and across the United States:
- 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 when managing retirement plans, we're perfectly positioned to understand the demands of each and develop a plan that fulfills the requirements of both, as well as those of your stockholders.
- As independent fiduciary advisors, we are legally and morally 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 grounded in trust and the common goal of increasing your and your employees' wealth.
Other services we offer in Eureka, MO:
Call Correct Capital to Speak With an ESOP Advisor in Eureka, MO Today
If you're interested in learning more about ESOPs or aspire to start the process of setting one up for your Eureka, MO business, get in touch with a Correct Capital ESOP advisor today. Let us do what we do best so you can concentrate on what you value most: positioning yourself, your business, and your employees up for success. Reach out with one of our Eureka, MO ESOP advisors now at 877-930-4015 or contact us online.
