ESOP advisor in Madison County, IL. Employee stock ownership plans (ESOPs) have become an increasingly popular retirement benefit for employees in various industries in Madison County, IL. They offer business owners a chance to move on from their company while significantly 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 Madison County, IL business owners can do by themselves. Correct Capital's knowledgeable and savvy ESOP advisors help businesses of all sizes, in Madison County, IL and around the country, create tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're seeking a trustworthy financial partner in Madison County, IL 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.
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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 or investments in other companies as in a typical retirement plan. ESOPs are 100% company funded, and often times shares offered to employees are not controlling shares, meaning control of the company stays with ownership and other executives. They offer excellent 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 retaining control. Upon reaching retirement, most employees sell the stock at market value.
Perhaps even more importantly, by handing over part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to spread out the tax consequences of the sale instead of having to pay taxes at once. 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)
- 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
- Boost employee motivation and productivity
- Improve employee retention and loyalty
- Simplify succession planning and business continuity
- Keep control while organizing or easing into retirement
- Raise personal liquidity of owners, but still retain control of the company
- Carry on your business' legacy and culture
What About KSOPs?
A KSOP is a qualified plan that is a mix between an ESOP and a 401(k). Ownership shares are offered to employees as in an ESOP, employees can put in their own money to acquire additional stock 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 more 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 Madison County, IL ESOP advisors and retirement consultants of Correct Capital can assist you find the right plans for your business.
How Our Madison County, IL 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 Madison County, IL ESOP advisory firm by your side 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 sell your ownership shares to an ESOP, you can 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 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 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 assure you receive the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll develop and set up an ESOP that works best for you and your one-of-a-kind company. We like to test ourselves and our clients to get creative with retirement plan offerings to maximize the advantages they offer. We'll evaluate your needs, evaluate various ESOP options, and suggest a personalized ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it's a good idea, we may also advise combining an ESOP with a 401(k) or different retirement plans to additionally increase 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 identify the optimal tax-advantaged retirement plans for their business. For clients interested in 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 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 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, attorneys, and a trustee to acquire stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Madison County, IL can help you set up your ESOP team with dependable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the management of employee stock ownership plans. For instance, when employees participating in an ESOP at a closely held employer receive company stock in an ESOP distribution, they have the right to ask for the employer to repurchase them at fair market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on seniority 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 develops and matures, so will its implications for your company. ESOP advisors can plan for these changes and adapt to them in real time, allowing your plan to stay workable, compliant, and beneficial.
- Employee communication and education — Our ESOP advisors offer group meetings and personalized meetings with your employees so they can maximize the benefits from your retirement plan. With an ESOP advisor from Correct Capital, your employees won't just acquire partial ownership of your company, but they'll feel like they're obtaining ownership of their financial health and future.
Why Choose Correct Capital as Your ESOP Advisor in Madison County, IL
Correct Capital is an independent advisory firm that specializes in helping business owners create retirement plans and succession plans for their enterprises. There are numerous factors we point to that make us unique from other financial advisory firms in Madison County, IL, and throughout the United States:
- We know retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a wide range of industries, including for construction companies and contractors. As we work with both businesses and individuals and families when managing retirement plans, we're ideally suited to understand the requirements of each and establish a plan that meets the necessities of both, as well as those of your stockholders.
- As independent fiduciary advisors, we are legally and ethically bound to do what's in the best interest of you, your employees, and your company. We endeavor to establish long-term relationships with our clients based on trust and the shared goal of expanding your and your employees' monetary well-being.
Other services we offer in Madison County, IL:
Call Correct Capital to Speak With an ESOP Advisor in Madison County, IL Today
If you're interested in learning more about ESOPs or wish to commence the process of setting one up for your Madison County, IL business, get in touch with a Correct Capital ESOP advisor at this moment. Let us do what we do best so you can focus on what you care about most: setting yourself, your business, and your employees up for success. Get in touch with one of our Madison County, IL ESOP advisors now at 877-930-4015 or contact us online.
