ESOP advisor in Imperial, MO. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement benefit for employees in various industries in Imperial, MO. They offer business owners a chance to transition from their company while substantially reducing taxes on the sale, and offer employees a qualified retirement plan that builds their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Imperial, MO business owners can do without professional help. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in Imperial, MO and around the United States, establish tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're seeking an experienced financial partner in Imperial, MO who shares your goals of creating your company and employees for long-term 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 tax-advantaged 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 fully funded by the employer, and often times shares offered to employees are not controlling shares, meaning control of the company stays with ownership and other executives. They offer excellent incentives to employees while providing businesses with an improved value proposition to employees, and allow business owners to set up a succession plan while maintaining control. When they retire, most employees sell the stock at market value value.
Perhaps most importantly, by transferring 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 needing to pay taxes right away. In many cases, ESOPs are a transition 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 one day 100% owned as an S-Corp by the ESOP, it's not subject to federal income taxes
- Align the goals of employees and stockholders
- Offer a higher value proposition when hiring
- Increase employee motivation and productivity
- Boost employee retention and loyalty
- Enable succession planning and business continuity
- Maintain control while organizing or easing into retirement
- Amplify personal liquidity of owners, but still keep 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 provided to employees as in an ESOP, employees can deposit 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, including an ESOP or KSOP to a more traditional retirement plan allows you to get the benefits of both. The experienced Imperial, MO ESOP advisors and retirement consultants of Correct Capital can support you find the right plans for your business.
What Our Imperial, 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 Imperial, MO ESOP advisory firm to partner with to reap the most benefits of your plan. When you work with Correct Capital, we:
- Reduce your tax liability as much as possible — When you sell your ownership shares to an ESOP, you can reinvest the proceeds in alternative securities to defer capital gains taxes on the sales, permitting you to retain more of the sales proceeds for different purposes. To postpone 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 ensure you receive the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll create and implement an ESOP suited specifically to you and your company. We like to test ourselves and our clients to get creative with retirement plan offerings to maximize the benefits they provide. We'll assess your needs, assess various ESOP options, and recommend a customized ESOP that meets legal requirements and is aimed at optimizing benefits. If it makes sense, we may also advise combining an ESOP with a 401(k) or other retirement plans to further augment benefits, yet retain efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to comprehend their needs and collaborate with them to find the optimal qualified retirement plans for their business. For clients interested in an ESOP, part of that means conducting a feasibility analysis to ascertain 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 how they're best served
- 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 CPAs, lawyers, and a trustee to acquire stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Imperial, MO can help you set up your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the management of ESOPs. For instance, when employees participating in an ESOP at a closely held employer receive company stock in an ESOP distribution, they have the option to demand the employer to repurchase them at 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 sold 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 evolves 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 workable, compliant, and beneficial.
- Employee communication and education — Our ESOP advisors offer group sessions and personalized 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 partial ownership of your company, but they'll feel like they're gaining ownership of their economic well-being and future.
Why Choose Correct Capital as Your ESOP Advisor in Imperial, MO
Correct Capital is an independent advisory firm that specializes in helping business owners create retirement plans and succession plans for their companies. There are numerous factors we point to that make us unique from other financial consulting companies in Imperial, MO, and across 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 variety of industries, 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 establish a plan that fulfills the requirements of both, as well as those of your stockholders.
- Our award-winning Imperial, 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 80 years of combined experience, we pool our collective talents and insights to effectively cater to each client individually.
- As independent fiduciary advisors, we are lawfully and morally bound to do what's in the utmost benefit of you, your employees, and your company. We aim to form long-term relationships with our clients founded on trust and the mutual goal of expanding your and your employees' monetary well-being.
Other services we offer in Imperial, 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 Imperial, MO Today
If you're interested in learning more about ESOPs or wish to initiate the process of setting one up for your Imperial, MO business, reach out to a Correct Capital ESOP advisor at this moment. Let us do what we do best so you can concentrate on what you care about most: positioning yourself, your business, and your employees up for success. Reach out with one of our Imperial, MO ESOP advisors today at 877-930-4015 or contact us online.
