ESOP advisor in Madison County, IL. Employee stock ownership plans (ESOPs) are becoming a more and more common retirement plan for employees in various industries in Madison County, IL. They offer business owners an opportunity to move on from their company while substantially reducing taxes on the sale, and offer employees a qualified retirement plan that builds their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Madison County, IL business owners can do by themselves. Correct Capital's seasoned 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 an experienced financial partner in Madison County, IL who shares your goals of building your company and employees for enduring success, call Correct Capital at 877-930-4015, contact us online, or schedule a consultation with one of our financial advisors immediately.
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 an enhanced value proposition in the hiring process, 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 selling part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to disperse that tax hit instead of needing 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 free from federal income taxes
- Align the goals of employees and stockholders
- Present a higher value proposition when hiring
- Increase employee motivation and productivity
- Improve employee retention and loyalty
- Ease succession planning and business continuity
- Keep control while organizing or easing into retirement
- Increase 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 extended to employees as in an ESOP, employees can contribute their own money to buy 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 the risk tolerance that comes with 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 Madison County, IL ESOP advisors and retirement consultants of Correct Capital can help you find the best retirement plan for you, your business, and your employees.
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 to partner with to reap the most benefits of your plan. When you work with Correct Capital, we:
- Reduce your tax liability as much as possible — When you sell your ownership shares to an ESOP, you can reinvest the proceeds in different securities to defer 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 assure you get the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll design and set up an ESOP suited specifically to you and your company. We like to test ourselves and our clients to get creative with retirement plan offerings to maximize the benefits they provide. We'll assess your needs, evaluate several ESOP options, and recommend a tailored ESOP that meets legal requirements and is aimed at maximizing benefits. If it makes sense, we may also suggest combining an ESOP with a 401(k) or other retirement plans to further increase benefits, yet retain efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to comprehend 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 determine if it's a workable option for your company. We'll analyze:
- Cash flow, debts, and overall financial health
- Ownership structure to understand the implications of 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 accountants, attorneys, and a trustee to purchase 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 reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the management of employee stock ownership plans. 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 current market price.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on seniority of service. Most of the time, that means ownership of the company is sold 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 respond to them in real time, enabling your plan to stay workable, in accordance with regulations, and profitable.
- Employee communication and education — Our ESOP advisors offer collective workshops and one-on-one 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 a share of your company, but they'll feel like they're achieving 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 establish retirement plans and succession plans for their companies. There are multiple factors we believe set us apart from other financial consulting companies 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 variety of sectors, including for construction companies and contractors. As we work with both businesses and individuals and families to aid in setting up retirement plans, we're well-prepared to understand the demands of each and create a plan that satisfies the requirements of both, as well as those of your stockholders.
- Our award-winning Madison County, IL financial advisory team is composed 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 effectively cater to each client distinctively.
- As independent fiduciary advisors, we are legally and ethically 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 founded on trust and the common goal of growing your and your employees' financial prosperity.
Other services we offer in Madison County, IL:
- 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 Madison County, IL Today
If you're interested in learning more about ESOPs or desire to initiate the process of setting one up for your Madison County, IL business, reach out to a Correct Capital ESOP advisor at this moment. 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 prosperity. Contact with one of our Madison County, IL ESOP advisors immediately at 877-930-4015 or contact us online.
