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 greatly reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that increases their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most Imperial, MO business owners can do alone. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in Imperial, MO and around the United States, design tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're in search of an experienced financial partner in Imperial, MO who shares your goals of establishing 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 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 stock of the company that employs them, rather than savings funds or investments in other companies as in a typical retirement plan. ESOPs are fully funded by the employer, and often times shares offered to employees are not voting shares, meaning control of the company stays with the C-suite. They offer excellent 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 maintaining control. Upon reaching retirement, most employees sell the stock at market 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 immediately. In many cases, ESOPs are a transition 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)
- Additional 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
- Provide a higher value proposition when hiring
- Boost employee motivation and productivity
- Improve employee retention and loyalty
- Enable succession planning and business continuity
- Maintain control while preparing or easing into retirement
- Amplify 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 similar type of plan that is a combination of an ESOP and a 401(k). Ownership shares are offered to employees as in an ESOP, employees can add their own money to obtain additional shares through payroll deductions, or the company can match employee contributions with stock 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 receive the benefits of both. The experienced Imperial, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the best retirement plan for you, your business, and your employees.
How Our Imperial, 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 Imperial, MO ESOP advisory firm to partner with 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 sell your ownership shares to an ESOP, you have the option to reinvest the proceeds in other securities to postpone capital gains taxes on the sales, allowing you to retain more of the sales proceeds for other 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 payable until the taxpayer has a sale of the QRP. An ESOP advisor can ensure you get 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 innovative with retirement plan offerings to optimize the benefits they offer. We'll examine your needs, assess different ESOP options, and recommend a customized ESOP that meets legal requirements and is aimed at optimizing benefits. If it makes sense, we may also recommend combining an ESOP with a 401(k) or other retirement plans to further augment benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to understand their needs and work together with them to find the optimal tax-advantaged retirement plans for their business. For clients looking at an ESOP, part of that means carrying out a feasibility analysis to establish 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 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 accountants, attorneys, 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 establish your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict requirements 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 ask for 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 duration of service. Most of the time, that means ownership of the company is sold to the ESOP in increments. 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, allowing your plan to stay viable, in accordance with regulations, and profitable.
- 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 ESOP. With an ESOP advisor from Correct Capital, your employees won't just get a portion of your company, but they'll feel like they're obtaining ownership of their financial stability and future.
Why Choose Correct Capital as Your ESOP Advisor in Imperial, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners create retirement plans and succession plans for their enterprises. There are multiple factors we point to that distinguish us from other financial advisory firms in Imperial, MO, and across the nation:
- 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 to aid in setting up retirement plans, we're well-prepared to understand the requirements of each and develop 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 best interest of you, your employees, and your company. We aim to forge long-term relationships with our clients grounded in trust and the mutual goal of increasing your and your employees' monetary well-being.
Other services we offer in Imperial, MO:
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 start the process of setting one up for your Imperial, MO business, contact a Correct Capital ESOP advisor now. Let us do what we do best so you can prioritize on what you value most: positioning yourself, your business, and your employees up for success. Get in touch with one of our Imperial, MO ESOP advisors now at 877-930-4015 or contact us online.
