ESOP advisor in Fairview Heights, IL. Employee stock ownership plans (ESOPs) have become an increasingly common retirement benefit for employees in various industries in Fairview Heights, IL. They offer business owners a chance to step away from their company while greatly 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 Fairview Heights, IL business owners can do without professional help. Correct Capital's seasoned and savvy ESOP advisors help businesses of all sizes, in Fairview Heights, IL and around the nation, develop tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're seeking an experienced financial partner in Fairview Heights, IL who shares your goals of creating your company and employees for sustained success, call Correct Capital at 877-930-4015, contact us online, or schedule a consultation with one of our financial advisors today.
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What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a qualified retirement plan where employees receive shares of the company they work for, rather than savings or investments in other companies as in a typical retirement plan. ESOPs are 100% company funded, and often times shares offered to employees are not voting shares, meaning control of the company stays with the C-suite. 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 retaining control. Upon reaching retirement, most employees sell the stock at stock market value.
Perhaps most importantly, by selling 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 being required to pay taxes promptly. 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)
- 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
- Present a higher value proposition when hiring
- Boost employee motivation and productivity
- Boost employee retention and loyalty
- Ease succession planning and business continuity
- Retain control while organizing or easing into retirement
- Increase 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 put in their own money to purchase additional stock through payroll deductions, or the company can match employee contributions with shares instead of 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 Fairview Heights, IL ESOP advisors and retirement consultants of Correct Capital can assist you find the right plans for your business.
What Our Fairview Heights, 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 Fairview Heights, IL ESOP advisory firm by your side 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 have the option to reinvest the proceeds in alternative securities to postpone capital gains taxes on the sales, allowing you to retain more of the sales proceeds for other purposes. 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 owed until the taxpayer has a sale of the QRP. An ESOP advisor can assure you get the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll develop and set up 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 optimize the advantages they offer. We'll evaluate your needs, assess several ESOP options, and recommend a personalized ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it's a good idea, we may also advise combining an ESOP with a 401(k) or different retirement plans to additionally boost 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 company. For clients looking at an ESOP, part of that means carrying out a feasibility analysis to ascertain if it's a workable option for your company. We'll look at:
- Cash flow, debts, and overall financial health
- Ownership structure to understand how it'll be affected by 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 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 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, attorneys, and a trustee to purchase stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Fairview Heights, IL can help you arrange your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict guidelines for the management 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 require the employer to redeem them at fair market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on length of service. Most of the time, that means ownership of the company is passed to the ESOP in stages. 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 workable, in accordance with regulations, and beneficial.
- 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 retirement plan. With an ESOP advisor from Correct Capital, your employees won't just acquire a portion of your company, but they'll feel like they're obtaining ownership of their financial stability and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Fairview Heights, IL
Correct Capital is an independent advisory firm that specializes in helping business owners establish retirement plans and succession plans for their enterprises. There are multiple factors we point to that set us apart from other investment advisory agencies in Fairview Heights, IL, and throughout the United States:
- 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 to assist in setting up retirement plans, we're perfectly positioned to understand the needs of each and establish a plan that fulfills the requirements of both, as well as those of your stockholders.
- As independent fiduciary advisors, we are lawfully and ethically bound to do what's in the utmost benefit of you, your employees, and your company. We strive to forge long-term relationships with our clients based on trust and the mutual goal of expanding your and your employees' monetary well-being.
Other services we offer in Fairview Heights, IL:
Call Correct Capital to Speak With an ESOP Advisor in Fairview Heights, IL Today
If you're interested in learning more about ESOPs or wish to initiate the process of setting one up for your Fairview Heights, IL 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 care about most: positioning yourself, your business, and your employees up for prosperity. Contact with one of our Fairview Heights, IL ESOP advisors now at 877-930-4015 or contact us online.
