ESOP advisor in Madison County, IL. Employee stock ownership plans (ESOPs) have become an increasingly common retirement plan for employees in a variety of sectors 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 qualified 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 alone. Correct Capital's proficient 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 bottom line.
If you're in search of a trustworthy financial partner in Madison County, IL who shares your goals of setting up your company and employees for long-term success, call Correct Capital at 314-930-4015, contact us online, or schedule an appointment with one of our financial advisors right away.
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 funds or investments in other companies such as in a 401(k). ESOPs are fully funded by the employer, and often times shares offered to employees are not decision-making shares, meaning control of the company stays with the C-suite. They offer great incentives to employees while providing businesses with an improved 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 marketplace value.
Of special interest to business owners, by selling 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 being required to pay taxes right away. In many cases, ESOPs are a transition plan that keeps the most amount of money possible in your pocket.
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 one day 100% owned as an S-Corp by the ESOP, it's not subject to federal income taxes
- Align the goals of employees and stockholders
- Provide a higher value proposition when hiring
- Enhance employee motivation and productivity
- Improve employee retention and loyalty
- Facilitate 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 similar type of plan that is a combination of an ESOP and a 401(k). Ownership shares are given to employees as in an ESOP, employees can add their own money to acquire additional shares 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 get 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 reap the most benefits 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 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 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.
- Personalize your ESOP and retirement plans — Along with your team, we'll develop and set up an ESOP suited specifically to you and your company. We like to test ourselves and our clients to get imaginative with retirement plan offerings to optimize the benefits they offer. We'll evaluate your needs, analyze different ESOP options, and propose a customized ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it'll work, we may also recommend combining an ESOP with a 401(k) or other retirement plans to further increase benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to grasp their needs and collaborate with them to find the best qualified retirement plans for their company. For clients looking at an ESOP, part of that means conducting a feasibility analysis to ascertain if it's a viable option for your company. We'll look at:
- 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 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 collaborate 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 buy 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 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 buy back them at fair market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on length of service. Usually, that means ownership of the company is sold 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 evolves and matures, so will its impact on your company. ESOP advisors can plan for these changes and adapt to them in real time, facilitating your plan to stay workable, in accordance with regulations, and beneficial.
- Employee communication and education — Our ESOP advisors offer collective workshops and personalized meetings with your employees so they can maximize the benefits from your employee stock ownership plan. With an ESOP advisor from Correct Capital, your employees won't just get partial ownership 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 Madison County, IL
Correct Capital is an independent advisory firm that specializes in assisting business owners establish retirement plans and succession plans for their businesses. There are several factors we believe make us unique from other investment advisory agencies in Madison County, IL, and all over 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 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 well-prepared to understand the needs of each and develop a plan that meets the requirements of both, as well as those of your stockholders.
- Our award-winning Madison County, IL financial advisory team is made up of a diverse 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 individually.
- As independent fiduciary advisors, we are lawfully and morally 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 common goal of increasing your and your employees' wealth.
Other services we offer in Madison County, IL:
- Company 401(k) Plans
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
- Social Security Consultants Near Me
- Retirement Calculator
- Retirement Planning
- Rollover 401(k)
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, contact a Correct Capital ESOP advisor today. 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 achievement. Get in touch with one of our Madison County, IL ESOP advisors now at 314-930-4015 or contact us online.