ESOP advisor in Frontenac, MO. Employee stock ownership plans (ESOPs) are becoming a more and more common retirement plan for employees in various industries in Frontenac, 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 investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most Frontenac, MO business owners can do without professional help. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in Frontenac, MO and around the nation, design tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're in search of an experienced financial partner in Frontenac, MO who shares your goals of building your company and employees for long-term success, call Correct Capital at 877-930-4015, contact us online, or schedule an appointment with one of our financial advisors now.
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Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
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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 100% company funded, and often times shares offered to employees are not voting 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 retaining control. Upon reaching retirement, most employees sell the stock at marketplace value.
Of special interest to business owners, by transferring part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to allocate that tax hit instead of having to pay taxes at once. In many cases, ESOPs are a succession plan that keeps the most amount of money attainable 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
- Offer a higher value proposition when hiring
- Enhance employee motivation and productivity
- Boost employee retention and loyalty
- Simplify succession planning and business continuity
- Maintain control while arranging or easing into retirement
- Boost personal liquidity of owners, but still retain control of the company
- Carry on 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 extended 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 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 get the benefits of both. The experienced Frontenac, MO ESOP advisors and retirement consultants of Correct Capital can support you find the best retirement plan for you, your business, and your employees.
What Our Frontenac, 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 a knowledgeable Frontenac, MO ESOP advisory firm in your corner to get the most out 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 alternative securities to defer 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 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 create and execute 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 examine your needs, assess various ESOP options, and suggest a personalized ESOP that meets legal requirements and is aimed at maximizing benefits. If it makes sense, we may also recommend combining an ESOP with a 401(k) or different retirement plans to additionally boost benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to grasp their needs and work together with them to discover the best qualified retirement plans for their business. For clients looking at an ESOP, part of that means performing a feasibility analysis to determine if it's a feasible 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 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 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 CPAs, lawyers, and a trustee to purchase stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Frontenac, MO can help you arrange your ESOP team with dependable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict requirements for the oversight of employee stock ownership plans. For instance, when individuals enrolled in an employee stock ownership plan at a closely held employer receive company stock in an ESOP distribution, they have the right to ask for the employer to buy back them at market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on seniority of service. Usually, 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 develops and matures, so will its impact on your company. ESOP advisors can plan for these changes and respond to them in real time, allowing your plan to stay workable, in accordance with regulations, and advantageous.
- Employee communication and education — Our ESOP advisors offer group meetings and personalized 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 acquire a share of your company, but they'll feel like they're gaining ownership of their financial health and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Frontenac, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners create retirement plans and succession plans for their businesses. There are numerous factors we believe make us unique from other financial advisory firms in Frontenac, MO, and all over the country:
- 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 ideally suited to understand the needs of each and establish a plan that fulfills the necessities 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 based on trust and the shared goal of increasing your and your employees' monetary well-being.
Other services we offer in Frontenac, MO:
Call Correct Capital to Speak With an ESOP Advisor in Frontenac, MO Today
If you're interested in learning more about ESOPs or wish to start the process of setting one up for your Frontenac, MO business, reach out to 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. Reach out with one of our Frontenac, MO ESOP advisors now at 877-930-4015 or contact us online.