ESOP advisor in Lake St. Louis, MO. Employee stock ownership plans (ESOPs) are becoming a more and more well-liked retirement plan for employees in a variety of sectors in Lake St. Louis, MO. They offer business owners a chance to step away from their company while substantially reducing taxes on the sale, and offer employees a qualified retirement plan that increases their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Lake St. Louis, MO business owners can do by themselves. Correct Capital's knowledgeable and savvy ESOP advisors help businesses of all sizes, in Lake St. Louis, MO and around the country, design tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're looking for a trustworthy financial partner in Lake St. Louis, 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 an appointment with one of our financial advisors today.
What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a tax-advantaged retirement plan where employees receive shares of the company they work for, 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 controlling shares, meaning control of the company stays with the C-suite. They offer great incentives to employees while providing businesses with a better value proposition in the hiring process, and allow business owners to set up a succession plan while maintaining control. When they retire, most employees sell the stock at stock market 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 that tax hit instead of having to pay taxes immediately. 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)
- Additional tax deductions through contributions made to employees
- If the business is eventually 100% owned as an S-Corp by the ESOP, it's free from federal income taxes
- Align the goals of employees and stockholders
- Present a higher value proposition when hiring
- Increase employee motivation and productivity
- Boost employee retention and loyalty
- Simplify succession planning and business continuity
- Retain control while arranging 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 similar type of plan that is a combination of an ESOP and a 401(k). Ownership shares are extended to employees as in an ESOP, employees can contribute their own money to acquire 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 more diverse investments. In fact, adding an ESOP or KSOP to a more traditional retirement plan allows you to get the benefits of both. The experienced Lake St. Louis, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the right plans for your business.
How Our Lake St. Louis, 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 Lake St. Louis, 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 different securities to postpone capital gains taxes on the sales, permitting you to keep 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 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 set up an ESOP that works best for you and your distinctive company. We like to challenge ourselves and our clients to get innovative with retirement plan offerings to enhance the advantages they offer. We'll assess your needs, analyze different ESOP options, and suggest a personalized ESOP that meets legal requirements and is aimed at maximizing benefits. If it makes sense, we may also recommend combining an ESOP with a 401(k) or alternative 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 collaborate with them to identify the optimal qualified retirement plans for their business. 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 examine:
- 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 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 Lake St. Louis, 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 oversight 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 right to ask for the employer to buy back 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 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 progresses and matures, so will its impact on your company. ESOP advisors can plan for these changes and adapt to them in real time, enabling your plan to stay viable, 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 ESOP. 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 gaining ownership of their economic well-being and future.
Why Choose Correct Capital as Your ESOP Advisor in Lake St. Louis, 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 believe distinguish us from other investment advisory agencies in Lake St. Louis, MO, and all over 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 wide 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 demands of each and develop a plan that fulfills the needs of both, as well as those of your stockholders.
- Our award-winning Lake St. Louis, 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 best serve each client distinctively.
- As independent fiduciary advisors, we are legally and morally bound to do what's in the optimal interest of you, your employees, and your company. We aim to establish long-term relationships with our clients grounded in trust and the common goal of expanding your and your employees' monetary well-being.
Other services we offer in Lake St. Louis, 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 Lake St. Louis, MO Today
If you're interested in learning more about ESOPs or aspire to initiate the process of setting one up for your Lake St. Louis, 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: positioning yourself, your business, and your employees up for achievement. Get in touch with one of our Lake St. Louis, MO ESOP advisors immediately at 877-930-4015 or contact us online.
