ESOP advisor in Lake St. Louis, MO. Employee stock ownership plans (ESOPs) are becoming a more and more common retirement benefit for employees in various industries in Lake St. Louis, MO. They offer business owners a chance to step away from their company while considerably reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that builds their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most Lake St. Louis, MO business owners can do alone. Correct Capital's seasoned and savvy ESOP advisors help businesses of all sizes, in Lake St. Louis, MO and around the country, establish tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're seeking an experienced financial partner in Lake St. Louis, MO who shares your goals of creating your company and employees for sustained success, call Correct Capital at 877-930-4015, contact us online, or schedule a consultation with one of our financial advisors at this moment.
Schedule a Meeting With an Advisor Today
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.
Schedule a 15-Minute Introductory Call
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 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 governing shares, meaning control of the company stays with ownership and other executives. They offer excellent incentives to employees while providing businesses with a superior value proposition to employees, and allow business owners to set up a succession plan while preserving control. When they retire, most employees sell the stock at 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 disperse the tax consequences of the sale instead of needing to pay taxes at once. In many cases, ESOPs are a transition plan that keeps the most amount of money achievable 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 free 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
- Facilitate succession planning and business continuity
- Keep control while organizing or easing into retirement
- Boost 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 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 stock instead of 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, including an ESOP or KSOP to a more traditional retirement plan allows you to obtain 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 other securities to postpone capital gains taxes on the sales, allowing you to retain more of the profit. To defer capital gains taxes, your ESOP advisor can help you perform a Section 1042 exchange by selling at least 30% of your company to the ESOP and reinvesting the proceeds in qualified replacement securities or QRP. Taxes would be payable until the taxpayer has a disposition 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 innovative with retirement plan offerings to enhance the benefits they offer. We'll examine your needs, evaluate different ESOP options, and propose a personalized ESOP that meets legal requirements and is aimed at optimizing benefits. If it makes sense, we may also suggest combining an ESOP with a 401(k) or alternative retirement plans to further boost 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 find the optimal tax-advantaged retirement plans for their company. For clients interested in an ESOP, part of that means performing 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 what they need from their retirement plan
- 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 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 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 Lake St. Louis, MO can help you establish your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the oversight of retirement plans. For example, when individuals enrolled in an employee stock ownership plan at a closely held employer receive company stock in an ESOP distribution, they have the right to require the employer to buy back them at market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on duration of service. Usually, 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 evolves and matures, so will its impact on your company. ESOP advisors can plan for these changes and react to them in real time, facilitating your plan to stay viable, compliant, and advantageous.
- Employee communication and education — Our ESOP advisors offer collective workshops and personalized 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 share of your company, but they'll feel like they're obtaining ownership of their economic well-being and eventual retirement.
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 establish retirement plans and succession plans for their enterprises. There are several factors we point to that distinguish us from other investment advisory agencies in Lake St. Louis, MO, and across the United States:
- 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 assist in setting up retirement plans, we're perfectly positioned to understand the needs of each and create a plan that meets the requirements 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 optimal interest of you, your employees, and your company. We endeavor to form long-term relationships with our clients based on trust and the mutual goal of expanding your and your employees' wealth.
Other services we offer in Lake St. Louis, MO:
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 wish to start the process of setting one up for your Lake St. Louis, MO business, contact 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: establishing yourself, your business, and your employees up for success. Get in touch with one of our Lake St. Louis, MO ESOP advisors now at 877-930-4015 or contact us online.
