ESOP advisor in Richmond Heights, MO. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement plan for employees in a variety of sectors in Richmond Heights, MO. They offer business owners a chance to step away 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 Richmond Heights, MO business owners can do by themselves. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in Richmond Heights, MO and around the country, design tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're looking for an experienced financial partner in Richmond Heights, MO who shares your goals of building your company and employees for sustained success, call Correct Capital at 877-930-4015, contact us online, or schedule a consultation 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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What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a tax-advantaged retirement plan where employees receive stock of the company that employs them, 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 controlling shares, meaning control of the company stays with ownership and other executives. They offer fantastic incentives to employees while providing businesses with a better 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 market value.
Perhaps even more importantly, by selling part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to spread out the tax consequences of the sale instead of being required to pay taxes promptly. In many cases, ESOPs are a succession plan that keeps the most amount of money possible 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)
- 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
- Maintain 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 similar type of plan that is a mix between an ESOP and a 401(k). Ownership shares are given to employees as in an ESOP, employees can put in their own money to obtain 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 more 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 Richmond Heights, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the right plans for your business.
What Our Richmond Heights, 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 Richmond Heights, MO ESOP advisory firm in your corner to get the most out 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 alternative securities to defer capital gains taxes on the sales, permitting you to retain more of the sales proceeds for other 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 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 guarantee you obtain the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll create and execute an ESOP suited specifically to you and your company. We like to challenge ourselves and our clients to get creative with retirement plan offerings to optimize the benefits they offer. We'll evaluate your needs, assess several ESOP options, and recommend a tailored ESOP that meets legal requirements and is aimed at maximizing benefits. If we believe it'll work, we may also suggest combining an ESOP with a 401(k) or different retirement plans to further boost benefits, yet retain efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to understand their needs and collaborate 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 establish if it's a viable 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 acquire stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Richmond Heights, MO 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 ESOPs. 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 buy back 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 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 progresses and matures, so will its impact on your company. ESOP advisors can plan for these changes and react 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 group meetings and personalized meetings with your employees so they can maximize the benefits 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 health and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Richmond Heights, MO
Correct Capital is an independent advisory firm that specializes in helping business owners create retirement plans and succession plans for their companies. There are multiple factors we point to that make us unique from other financial consulting companies in Richmond Heights, MO, and across the country:
- 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 support in setting up retirement plans, we're well-prepared to understand the requirements of each and establish a plan that satisfies 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 best interest of you, your employees, and your company. We aim to forge long-term relationships with our clients based on trust and the shared goal of growing your and your employees' wealth.
Other services we offer in Richmond Heights, MO:
Call Correct Capital to Speak With an ESOP Advisor in Richmond Heights, MO Today
If you're interested in learning more about ESOPs or aspire to start the process of setting one up for your Richmond Heights, MO business, get in touch with a Correct Capital ESOP advisor now. Let us do what we do best so you can prioritize on what you care about most: positioning yourself, your business, and your employees up for success. Reach out with one of our Richmond Heights, MO ESOP advisors today at 877-930-4015 or contact us online.
