ESOP advisor in Kirkwood, MO. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement plan for employees in various industries in Kirkwood, MO. They offer business owners a chance to step away from their company while significantly reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that increases their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Kirkwood, MO business owners can do without professional help. Correct Capital's knowledgeable and savvy ESOP advisors help businesses of all sizes, in Kirkwood, MO and around the United States, create tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're in search of a trustworthy financial partner in Kirkwood, MO who shares your goals of establishing 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 immediately.
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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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About Employee Stock Ownership Plans (ESOPs)
An ESOP is a qualified retirement plan where employees receive stock of the company that employs them, rather than savings accounts 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 controlling shares, meaning control of the company stays with ownership and other executives. They offer great 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. When they retire, most employees sell the stock at market value.
Perhaps most importantly, by selling part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to distribute that tax hit 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)
- Further 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
- Provide a higher value proposition when hiring
- Increase employee motivation and productivity
- Enhance employee retention and loyalty
- Facilitate succession planning and business continuity
- Retain control while organizing or easing into retirement
- Boost personal liquidity of owners, but still retain control of the company
- Preserve your business' legacy and culture
What About KSOPs?
A KSOP is a qualified 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 buy additional stock 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, introducing an ESOP or KSOP to a more traditional retirement plan allows you to receive the benefits of both. The experienced Kirkwood, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the right plans for your business.
How Our Kirkwood, MO ESOP Advisors Can Help
Whether you're moving on from control of your company or are interested in an ESOP's other benefits, you'll need a knowledgeable Kirkwood, 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 can reinvest the proceeds in different 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 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 ensure you get the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll create and execute 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 enhance the benefits they offer. We'll assess your needs, evaluate several ESOP options, and suggest a tailored ESOP that meets legal requirements and is aimed at maximizing benefits. If we believe it's a good idea, we may also recommend combining an ESOP with a 401(k) or other retirement plans to further boost benefits, yet retain 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 find the optimal qualified retirement plans for their company. For clients looking at an ESOP, part of that means carrying out a feasibility analysis to ascertain if it's a workable option for your company. We'll analyze:
- 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 determine 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 accountants, attorneys, and a trustee to purchase stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Kirkwood, MO can help you arrange your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict guidelines for the management of ESOPs. For instance, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the right to demand the employer to buy back them at fair market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on how long they've worked there. Most of the time, 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 progresses 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, compliant, and beneficial.
- Employee communication and education — Our ESOP advisors offer group sessions and individual consultations 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 portion of your company, but they'll feel like they're achieving ownership of their financial health and future.
Why Choose Correct Capital as Your ESOP Advisor in Kirkwood, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners arrange retirement plans and succession plans for their companies. There are several factors we believe set us apart from other financial advisory firms in Kirkwood, MO, and throughout the U.S.:
- 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 demands of each and establish a plan that satisfies the requirements of both, as well as those of your stockholders.
- As independent fiduciary advisors, we are lawfully 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 based on trust and the shared goal of increasing your and your employees' financial prosperity.
Other services we offer in Kirkwood, MO:
Call Correct Capital to Speak With an ESOP Advisor in Kirkwood, MO Today
If you're interested in learning more about ESOPs or desire to initiate the process of setting one up for your Kirkwood, MO business, get in touch with a Correct Capital ESOP advisor now. Let us do what we do best so you can prioritize on what you care about most: establishing yourself, your business, and your employees up for success. Contact with one of our Kirkwood, MO ESOP advisors immediately at 877-930-4015 or contact us online.
