ESOP advisor in Frontenac, MO. Employee stock ownership plans (ESOPs) have become an increasingly well-liked retirement plan for employees in various industries in Frontenac, MO. They offer business owners a chance to move on from their company while considerably reducing taxes on the sale, and offer employees a qualified 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 alone. Correct Capital's seasoned and savvy ESOP advisors help businesses of all sizes, in Frontenac, MO and around the U.S., create tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're looking for a trustworthy financial partner in Frontenac, MO who shares your goals of establishing 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 immediately.
What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a qualified retirement plan where employees receive shares of the company that employs them, rather than savings 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 controlling shares, meaning control of the company stays with the C-suite. They offer fantastic incentives to employees while providing businesses with a better 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 even more importantly, by transferring part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to distribute that tax hit instead of being required to pay taxes promptly. In many cases, ESOPs are a transition plan that keeps the most amount of money possible 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 one day 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
- Improve employee motivation and productivity
- Enhance employee retention and loyalty
- Ease succession planning and business continuity
- Maintain control while planning or easing into retirement
- Increase personal liquidity of owners, but still retain control of the company
- Preserve 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 add their own money to buy additional shares 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, adding an ESOP or KSOP to a more traditional retirement plan allows you to receive the benefits of both. The experienced Frontenac, MO ESOP advisors and retirement consultants of Correct Capital can aid you find the right plans for your business.
How Our Frontenac, 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 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:
- 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 alternative securities to postpone capital gains taxes on the sales, permitting you to keep more of the sales proceeds for various purposes. To postpone capital gains taxes, your ESOP advisor can help you carry out 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 payable until the taxpayer has a disposition of the QRP. An ESOP advisor can assure you obtain 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 test ourselves and our clients to get imaginative with retirement plan offerings to optimize the benefits they offer. We'll assess your needs, assess different ESOP options, and propose a personalized ESOP that meets legal requirements and is aimed at maximizing benefits. If we believe it'll work, we may also suggest combining an ESOP with a 401(k) or other retirement plans to further increase benefits, yet retain 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 company. For clients interested in an ESOP, part of that means conducting a feasibility analysis to ascertain 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 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 buy stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Frontenac, MO can help you establish your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the management 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 option to demand 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 length of service. Most of the time, 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 develops and matures, so will its implications for 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 advantageous.
- Employee communication and education — Our ESOP advisors offer group meetings and one-on-one meetings with your employees so they can get the most from your retirement plan. With an ESOP advisor from Correct Capital, your employees won't just get a share of your company, but they'll feel like they're gaining ownership of their economic well-being 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 establish retirement plans and succession plans for their companies. There are multiple factors we point to that distinguish us from other investment advisory agencies in Frontenac, MO, and across 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 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 well-prepared to understand the needs of each and develop a plan that meets the requirements of both, as well as those of your stockholders.
- Our award-winning Frontenac, MO financial advisory team is made up 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 effectively cater to each client uniquely.
- As independent fiduciary advisors, we are legally and ethically bound to do what's in the best interest of you, your employees, and your company. We strive to forge long-term relationships with our clients founded on trust and the shared goal of increasing your and your employees' wealth.
Other services we offer in Frontenac, 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
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 commence the process of setting one up for your Frontenac, MO business, reach out to a Correct Capital ESOP advisor now. Let us do what we do best so you can prioritize on what you value most: establishing yourself, your business, and your employees up for success. Contact with one of our Frontenac, MO ESOP advisors now at 877-930-4015 or contact us online.
