ESOP advisor in Millstadt, IL. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement plan for employees in various industries in Millstadt, IL. They offer business owners a chance to transition 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 Millstadt, IL business owners can do by themselves. Correct Capital's seasoned and savvy ESOP advisors help businesses of all sizes, in Millstadt, IL and around the United States, design tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're in search of an experienced financial partner in Millstadt, IL who shares your goals of building your company and employees for enduring success, call Correct Capital at 314-930-4015, contact us online, or schedule a consultation with one of our financial advisors immediately.
About Employee Stock Ownership Plans (ESOPs)
An ESOP is a qualified retirement plan where employees receive shares of the company they work for, rather than savings accounts 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 controlling shares, meaning control of the company stays with the C-suite. They offer excellent 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 retaining control. When they retire, most employees sell the stock at marketplace value.
Perhaps even more importantly, by handing over part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to allocate the tax consequences of the sale instead of needing to pay taxes immediately. In many cases, ESOPs are a succession plan that keeps the most amount of money feasible 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 eventually 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
- Improve employee motivation and productivity
- Enhance employee retention and loyalty
- Simplify succession planning and business continuity
- Keep control while planning or easing into retirement
- Raise personal liquidity of owners, but still hold on to 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 put in their own money to obtain additional shares 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 receive the benefits of both. The experienced Millstadt, IL ESOP advisors and retirement consultants of Correct Capital can assist you find the best retirement plan for you, your company, and your employees.
How Our Millstadt, IL ESOP Advisors Can Help
Whether you're stepping from control of your company or are interested in an ESOP's other benefits, you'll need a knowledgeable Millstadt, 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 transfer your ownership shares to an ESOP, you have the option to reinvest the proceeds in different securities to postpone capital gains taxes on the sales, allowing you to retain more of the sales proceeds for various purposes. To defer 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 the proceeds in qualified replacement securities or QRP. Taxes would be owed until the taxpayer has a disposition of the QRP. An ESOP advisor can guarantee 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 that works best for you and your unique company. We like to challenge ourselves and our clients to get innovative with retirement plan offerings to maximize the benefits they provide. We'll examine your needs, analyze several 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 increase benefits, yet retain 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 best tax-advantaged retirement plans for their business. For clients interested in 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 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 see 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 work 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 buy stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Millstadt, 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 administration of ESOPs. 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 require the employer to repurchase them at market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on how long they've worked there. Most of the time, 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 impact on your company. ESOP advisors can plan for these changes and adapt to them in real time, enabling your plan to stay workable, compliant, and profitable.
- Employee communication and education — Our ESOP advisors offer collective workshops and one-on-one 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 portion of your company, but they'll feel like they're obtaining ownership of their financial stability and future.
Why Choose Correct Capital as Your ESOP Advisor in Millstadt, IL
Correct Capital is an independent advisory firm that specializes in assisting business owners arrange retirement plans and succession plans for their businesses. There are multiple factors we believe distinguish us from other investment advisory agencies in Millstadt, IL, and all over the country:
- 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 sectors, 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 demands of each and establish a plan that fulfills the needs of both, as well as those of your stockholders.
- Our award-winning Millstadt, IL financial advisory team is made up 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 distinctively.
- 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 aim to form long-term relationships with our clients based on trust and the common goal of increasing your and your employees' financial prosperity.
Other services we offer in Millstadt, 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
- Social Security Consultants Near Me
- Retirement Calculator
Call Correct Capital to Speak With an ESOP Advisor in Millstadt, IL Today
If you're interested in learning more about ESOPs or desire to initiate the process of setting one up for your Millstadt, IL business, reach out to a Correct Capital ESOP advisor today. Let us do what we do best so you can prioritize on what you value most: positioning yourself, your business, and your employees up for success. Get in touch with one of our Millstadt, IL ESOP advisors now at 314-930-4015 or contact us online.