ESOP advisor in Lemay, MO. Employee stock ownership plans (ESOPs) are becoming a more and more common retirement benefit for employees in various industries in Lemay, MO. They offer business owners an opportunity to step away from their company while significantly reducing taxes on the sale, and offer employees a qualified retirement plan that increases their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most Lemay, MO business owners can do alone. Correct Capital's seasoned and savvy ESOP advisors help businesses of all sizes, in Lemay, MO and around the country, establish tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're in search of a trustworthy financial partner in Lemay, MO who shares your goals of building 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 today.
What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a qualified retirement plan where employees receive shares of the company that employs them, rather than savings accounts or investments in other companies such as in a 401(k). ESOPs are 100% company funded, and often times shares offered to employees are not decision-making shares, meaning control of the company stays with the C-suite. They offer superb 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 preserving control. Upon reaching retirement, 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 immediately. In many cases, ESOPs are a transition 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)
- Extra 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
- Boost employee motivation and productivity
- Improve employee retention and loyalty
- Simplify succession planning and business continuity
- Retain control while planning 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 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 purchase 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 the risk tolerance that comes with 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 Lemay, MO ESOP advisors and retirement consultants of Correct Capital can aid you find the right plans for your business.
How Our Lemay, 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 Lemay, MO ESOP advisory firm to partner with to reap the most benefits 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 alternative securities to defer capital gains taxes on the sales, allowing you to retain more of the profit. To postpone 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 that money in qualified replacement securities or QRP. Taxes would be payable until the taxpayer has a disposition of the QRP. An ESOP advisor can guarantee you get the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll design and implement an ESOP suited specifically to you and your company. We like to push ourselves and our clients to get creative with retirement plan offerings to enhance the advantages they offer. We'll assess your needs, assess various ESOP options, and recommend a customized ESOP that meets legal requirements and is aimed at maximizing benefits. If we believe it'll work, we may also advise combining an ESOP with a 401(k) or alternative retirement plans to additionally augment benefits, yet retain efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to grasp their needs and work together with them to find the best qualified retirement plans for their business. For clients looking at an ESOP, part of that means performing a feasibility analysis to ascertain if it's a viable 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 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, lawyers, and a trustee to purchase stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Lemay, MO can help you establish your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict guidelines for the management of ESOPs. For example, when employees participating in an ESOP at a closely held employer receive company stock in an ESOP distribution, they have the option to require the employer to redeem them at current market price.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on how long they've worked there. Usually, that means ownership of the company is passed 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 progresses and matures, so will its implications for your company. ESOP advisors can plan for these changes and adapt to them in real time, enabling your plan to stay feasible, in accordance with regulations, and beneficial.
- Employee communication and education — Our ESOP advisors offer group sessions and one-on-one meetings with your employees so they can get the most from your employee stock ownership plan. With an ESOP advisor from Correct Capital, your employees won't just get a share of your company, but they'll feel like they're obtaining ownership of their financial stability and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Lemay, 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 numerous factors we believe distinguish us from other financial advisory firms in Lemay, 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're experienced in retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a variety of sectors, including for construction companies and contractors. As we work with both businesses and individuals and families when managing retirement plans, we're perfectly positioned to understand the requirements of each and develop a plan that satisfies the requirements of both, as well as those of your stockholders.
- Our award-winning Lemay, 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 eight decades of combined experience, we pool our collective talents and insights to best serve each client uniquely.
- 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 endeavor to forge long-term relationships with our clients founded on trust and the shared goal of expanding your and your employees' financial prosperity.
Other services we offer in Lemay, 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 Lemay, MO Today
If you're interested in learning more about ESOPs or wish to start the process of setting one up for your Lemay, MO business, get in touch with a Correct Capital ESOP advisor today. Let us do what we do best so you can concentrate on what you value most: positioning yourself, your business, and your employees up for success. Contact with one of our Lemay, MO ESOP advisors now at 877-930-4015 or contact us online.
