ESOP advisor in Eureka, MO. Employee stock ownership plans (ESOPs) are becoming a more and more common retirement plan for employees in various industries in Eureka, 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 builds their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Eureka, MO business owners can do alone. Correct Capital's knowledgeable and savvy ESOP advisors help businesses of all sizes, in Eureka, MO and around the U.S., develop tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're looking for an experienced financial partner in Eureka, 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 an appointment with one of our financial advisors now.
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 funds 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 governing shares, meaning control of the company stays with the C-suite. They offer fantastic 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 preserving control. When they retire, most employees sell the stock at stock market value.
Perhaps even more importantly, by transferring part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to spread out the tax consequences of the sale instead of being required to pay taxes at once. In many cases, ESOPs are a transition plan that keeps the most amount of money achievable 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)
- Further tax deductions through contributions made to employees
- If the business is eventually 100% owned as an S-Corp by the ESOP, it's not subject to federal income taxes
- Align the goals of employees and stockholders
- Present a higher value proposition when hiring
- Boost employee motivation and productivity
- Improve employee retention and loyalty
- Facilitate 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
- Carry on your business' legacy and culture
What About KSOPs?
A KSOP is a similar type of plan that is a mix between an ESOP and a 401(k). Ownership shares are offered to employees as in an ESOP, employees can put in their own money to buy additional shares 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 the risk tolerance that comes with 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 Eureka, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the right plans for your business.
How Our Eureka, MO ESOP Advisors Can Help
Whether you're stepping from control of your company or are interested in an ESOP's other benefits, you'll need an experienced 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 transfer your ownership shares to an ESOP, you have the option to reinvest the proceeds in other securities to postpone capital gains taxes on the sales, allowing you to keep more of the profit. 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 the proceeds in qualified replacement securities or QRP. Taxes would be owed until the taxpayer has a sale of the QRP. An ESOP advisor can assure you receive the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll develop and implement an ESOP suited specifically to you and your company. We like to push ourselves and our clients to get imaginative with retirement plan offerings to maximize the advantages they provide. We'll assess your needs, evaluate several ESOP options, and recommend a customized ESOP that meets legal requirements and is aimed at maximizing benefits. If we believe it's a good idea, we may also advise combining an ESOP with a 401(k) or alternative retirement plans to further augment benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to understand their needs and collaborate with them to find the optimal qualified retirement plans for their company. For clients interested in an ESOP, part of that means carrying out a feasibility analysis to ascertain 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 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 Eureka, MO can help you set up your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict requirements for the management of retirement plans. 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 buy back 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 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 evolves and matures, so will its implications for your company. ESOP advisors can plan for these changes and react to them in real time, facilitating your plan to stay workable, in accordance with regulations, and beneficial.
- Employee communication and education — Our ESOP advisors offer group sessions and individual consultations with your employees so they can optimize the advantages from your ESOP. 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 obtaining ownership of their economic well-being and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Eureka, 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 numerous factors we believe make us unique from other financial advisory firms in Eureka, MO, and throughout the nation:
- 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 range of sectors, including for construction companies and contractors. As we work with both businesses and individuals and families to assist in setting up retirement plans, we're perfectly positioned to understand the demands of each and develop a plan that fulfills the necessities of both, as well as those of your stockholders.
- Our award-winning Eureka, MO financial advisory team is composed of a wide 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 optimally assist each client uniquely.
- As independent fiduciary advisors, we are lawfully and ethically bound to do what's in the best interest of you, your employees, and your company. We endeavor to form 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 Eureka, 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 Eureka, MO Today
If you're interested in learning more about ESOPs or wish to start the process of setting one up for your Eureka, MO business, contact a Correct Capital ESOP advisor now. Let us do what we do best so you can focus on what you value most: setting yourself, your business, and your employees up for achievement. Reach out with one of our Eureka, MO ESOP advisors today at 314-930-4015 or contact us online.