ESOP advisor in Oakville, MO. Employee stock ownership plans (ESOPs) have become an increasingly common retirement plan for employees in various industries in Oakville, 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 productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Oakville, MO business owners can do by themselves. Correct Capital's proficient and savvy ESOP advisors help businesses of all sizes, in Oakville, MO and around the country, develop tailored retirement plans that benefit themselves, their employees, and their profit.
If you're looking for an experienced financial partner in Oakville, MO who shares your goals of building your company and employees for long-term success, call Correct Capital at 877-930-4015, contact us online, or schedule a consultation with one of our financial advisors now.
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Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
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What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a tax-advantaged retirement plan where employees receive shares 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 governing 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 to employees, and allow business owners to set up a succession plan while retaining control. Upon reaching retirement, most employees sell the stock at stock market value.
Perhaps even more importantly, by transferring part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to distribute that tax hit instead of having to pay taxes immediately. In many cases, ESOPs are a succession plan that keeps the most amount of money attainable 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 exempt from federal income taxes
- Align the goals of employees and stockholders
- Offer a higher value proposition when hiring
- Improve employee motivation and productivity
- Enhance employee retention and loyalty
- Simplify succession planning and business continuity
- Retain control while preparing or easing into retirement
- Increase 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 mix between an ESOP and a 401(k). Ownership shares are given to employees as in an ESOP, employees can add their own money to buy additional shares through payroll deductions, or the company can match employee contributions with stock 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 receive the benefits of both. The experienced Oakville, MO ESOP advisors and retirement consultants of Correct Capital can support you find the right plans for your business.
How Our Oakville, MO ESOP Advisors Can Help
Whether you're moving on from control of your company or are interested in an ESOP's other benefits, you'll need a knowledgeable Oakville, 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 sell your ownership shares to an ESOP, you have the option to reinvest the proceeds in other 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 carry out 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 sale of the QRP. An ESOP advisor can assure you get the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll develop and implement an ESOP that works best for you and your unique company. We like to push ourselves and our clients to get creative with retirement plan offerings to optimize the benefits they provide. We'll examine your needs, assess different ESOP options, and propose a tailored ESOP that meets legal requirements and is aimed at maximizing benefits. If it makes sense, we may also recommend 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 optimal qualified retirement plans for their company. For clients looking at an ESOP, part of that means performing a feasibility analysis to determine if it's a feasible option for your company. We'll examine:
- 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 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 purchase stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Oakville, MO can help you set up your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict requirements for the management of retirement plans. For example, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the option to demand the employer to repurchase them at current market price.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on duration 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 progresses and matures, so will its impact on your company. ESOP advisors can plan for these changes and respond 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 individual consultations with your employees so they can get the most from your ESOP. With an ESOP advisor from Correct Capital, your employees won't just get a portion of your company, but they'll feel like they're achieving ownership of their financial stability and future.
Why Choose Correct Capital as Your ESOP Advisor in Oakville, MO
Correct Capital is an independent advisory firm that specializes in helping business owners arrange retirement plans and succession plans for their businesses. There are multiple factors we point to that distinguish us from other investment advisory agencies in Oakville, MO, and across the U.S.:
- We know 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 ideally suited to understand the demands of each and establish a plan that satisfies the requirements of both, as well as those of your stockholders.
- 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 strive to establish long-term relationships with our clients based on trust and the mutual goal of increasing your and your employees' monetary well-being.
Other services we offer in Oakville, MO:
Call Correct Capital to Speak With an ESOP Advisor in Oakville, MO Today
If you're interested in learning more about ESOPs or wish to initiate the process of setting one up for your Oakville, MO business, contact a Correct Capital ESOP advisor now. Let us do what we do best so you can concentrate on what you care about most: positioning yourself, your business, and your employees up for success. Contact with one of our Oakville, MO ESOP advisors immediately at 877-930-4015 or contact us online.
