ESOP advisor in O'Fallon, MO. Employee stock ownership plans (ESOPs) have become an increasingly popular retirement benefit for employees in various industries in O'Fallon, MO. They offer business owners a chance to exit their company while greatly reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that builds their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most O'Fallon, MO business owners can do alone. Correct Capital's knowledgeable and savvy ESOP advisors help businesses of all sizes, in O'Fallon, MO and around the U.S., establish tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're seeking an experienced financial partner in O'Fallon, MO who shares your goals of creating your company and employees for prolonged success, call Correct Capital at 877-930-4015, contact us online, or schedule an appointment with one of our financial advisors at this moment.
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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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About Employee Stock Ownership Plans (ESOPs)
An ESOP is a qualified retirement plan where employees receive stock of the company they work for, rather than savings 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 governing shares, meaning control of the company stays with ownership and other executives. They offer superb incentives to employees while providing businesses with a superior value proposition to employees, 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 allocate that tax hit instead of being required to pay taxes promptly. In many cases, ESOPs are a succession 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)
- Additional 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
- Boost employee motivation and productivity
- Boost employee retention and loyalty
- Simplify succession planning and business continuity
- Maintain control while preparing 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 similar type of plan that is a combination of an ESOP and a 401(k). Ownership shares are offered to employees as in an ESOP, employees can add their own money to purchase additional stock 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 more diverse investments. In fact, including an ESOP or KSOP to a more traditional retirement plan allows you to attain the benefits of both. The experienced O'Fallon, MO ESOP advisors and retirement consultants of Correct Capital can support you find the best retirement plan for you, your company, and your employees.
What Our O'Fallon, MO ESOP Advisors Do for You
Whether you're motivated by a succession plan, employee incentives, or any other of ESOPs' benefits, you'll need a knowledgeable O'Fallon, MO ESOP advisory firm in your corner to get the most out 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 other 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 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 disposition of the QRP. An ESOP advisor can ensure you receive the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll develop and execute an ESOP suited specifically to you and your company. We like to challenge ourselves and our clients to get innovative with retirement plan offerings to optimize the advantages they provide. We'll evaluate your needs, evaluate several ESOP options, and suggest a personalized ESOP that meets legal requirements and is aimed at maximizing benefits. If we believe it'll work, we may also advise 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 discover the best tax-advantaged retirement plans for their business. For clients interested in 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 how it'll be affected by 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 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 acquire stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in O'Fallon, MO can help you establish your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the administration of ESOPs. For instance, when individuals enrolled in an employee stock ownership plan at a closely held employer receive company stock in an ESOP distribution, they have the right to demand 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 how long they've worked there. Most of the time, 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 progresses and matures, so will its implications for your company. ESOP advisors can plan for these changes and respond to them in real time, allowing your plan to stay viable, in accordance with regulations, and profitable.
- Employee communication and education — Our ESOP advisors offer group sessions 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 attain a share of your company, but they'll feel like they're achieving ownership of their financial stability and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in O'Fallon, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners create retirement plans and succession plans for their companies. There are multiple factors we believe distinguish us from other investment advisory agencies in O'Fallon, MO, and across the country:
- We know 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 support in setting up retirement plans, we're well-prepared to understand the needs of each and create a plan that meets the needs 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 aim to forge long-term relationships with our clients founded on trust and the shared goal of expanding your and your employees' financial prosperity.
Other services we offer in O'Fallon, MO:
Call Correct Capital to Speak With an ESOP Advisor in O'Fallon, MO Today
If you're interested in learning more about ESOPs or desire to initiate the process of setting one up for your O'Fallon, MO business, get in touch with a Correct Capital ESOP advisor today. Let us do what we do best so you can prioritize on what you value most: establishing yourself, your business, and your employees up for success. Get in touch with one of our O'Fallon, MO ESOP advisors now at 877-930-4015 or contact us online.
