ESOP advisor in Frontenac, MO. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement benefit for employees in various industries in Frontenac, MO. They offer business owners an opportunity to move on from their company while greatly 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 Frontenac, MO business owners can do without professional help. Correct Capital's knowledgeable 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 an experienced financial partner in Frontenac, MO who shares your goals of setting up your company and employees for prolonged success, call Correct Capital at 877-930-4015, contact us online, or schedule a consultation with one of our financial advisors right away.
What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a qualified retirement plan where employees receive stock of the company that employs them, rather than savings funds 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 ownership and other executives. They offer superb incentives to employees while providing businesses with a superior 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 marketplace value.
Of special interest to business owners, by handing over part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to allocate the tax consequences of the sale instead of having to pay taxes immediately. In many cases, ESOPs are a succession 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)
- Extra 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
- Increase employee motivation and productivity
- Improve employee retention and loyalty
- Enable succession planning and business continuity
- Retain control while planning or easing into retirement
- Raise 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 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 contribute their own money to buy 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, incorporating an ESOP or KSOP to a more traditional retirement plan allows you to obtain the benefits of both. The experienced Frontenac, MO ESOP advisors and retirement consultants of Correct Capital can help you find the best retirement plan for you, your business, and your employees.
How Our Frontenac, MO ESOP Advisors Can Help
Whether you're motivated by a succession plan, employee incentives, or any other of ESOPs' benefits, you'll need an experienced Frontenac, MO ESOP advisory firm to partner with to reap the most benefits of your plan. When you work with Correct Capital, we:
- Minimize your tax liability as much as possible — When you sell your ownership shares to an ESOP, you can reinvest the proceeds in other securities to defer capital gains taxes on the sales, permitting you to keep more of the profit. 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 owed until the taxpayer has a disposition of the QRP. An ESOP advisor can assure you receive the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll create and implement an ESOP that works best for you and your distinctive company. We like to push ourselves and our clients to get innovative with retirement plan offerings to maximize the advantages they provide. We'll evaluate your needs, analyze different ESOP options, and recommend a personalized ESOP that meets legal requirements and is aimed at maximizing benefits. If it makes sense, we may also advise combining an ESOP with a 401(k) or different retirement plans to additionally augment benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to comprehend their needs and work together with them to identify the optimal qualified retirement plans for their company. For clients looking at an ESOP, part of that means conducting a feasibility analysis to ascertain if it's a feasible option for your company. We'll look at:
- 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 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, 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 reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict guidelines for the oversight of retirement plans. For instance, 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 redeem them at current market price.
- 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 passed 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 react to them in real time, enabling your plan to stay feasible, compliant, and beneficial.
- Employee communication and education — Our ESOP advisors offer group meetings and one-on-one meetings with your employees so they can optimize the advantages from your employee stock ownership plan. With an ESOP advisor from Correct Capital, your employees won't just attain 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 helping business owners establish retirement plans and succession plans for their businesses. There are numerous factors we point to that set us apart from other investment advisory agencies in Frontenac, MO, and throughout 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 industries, 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.
- 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 best serve 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 endeavor to establish long-term relationships with our clients grounded in trust and the shared goal of growing your and your employees' monetary well-being.
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 aspire to initiate the process of setting one up for your Frontenac, 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 care about most: establishing yourself, your business, and your employees up for achievement. Reach out with one of our Frontenac, MO ESOP advisors immediately at 877-930-4015 or contact us online.
