ESOP advisor in Richmond Heights, MO. Employee stock ownership plans (ESOPs) have become an increasingly well-liked retirement plan for employees in a variety of sectors in Richmond Heights, MO. They offer business owners an opportunity to exit their company while significantly reducing taxes on the sale, and offer employees a qualified retirement plan that increases their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most Richmond Heights, MO business owners can do alone. 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 a trustworthy financial partner in Richmond Heights, MO who shares your goals of establishing 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 at this moment.
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 funds 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 voting shares, meaning control of the company stays with the C-suite. They offer great 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 retaining control. When they retire, most employees sell the stock at marketplace value.
Of special interest to business owners, by handing over part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to disperse 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 achievable 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)
- 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
- Improve employee retention and loyalty
- Enable succession planning and business continuity
- Keep control while planning or easing into retirement
- Amplify 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 given to employees as in an ESOP, employees can deposit their own money to acquire 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, incorporating an ESOP or KSOP to a more traditional retirement plan allows you to receive the benefits of both. The experienced Richmond Heights, MO ESOP advisors and retirement consultants of Correct Capital can aid you find the right plans for your business.
How Our Richmond Heights, 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 an experienced Richmond Heights, MO ESOP advisory firm to partner with to get the most out 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 can reinvest the proceeds in different securities to postpone capital gains taxes on the sales, allowing you to keep more of the sales proceeds for other purposes. To postpone 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 payable until the taxpayer has a sale of the QRP. An ESOP advisor can assure 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 that works best for you and your unique company. We like to test ourselves and our clients to get innovative with retirement plan offerings to maximize the advantages they offer. We'll evaluate your needs, evaluate different ESOP options, and suggest 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 different retirement plans to further augment 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 find the optimal qualified retirement plans for their company. For clients looking at an ESOP, part of that means carrying out a feasibility analysis to establish if it's a workable 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 what they need from their retirement plan
- 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 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 CPAs, lawyers, 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 arrange your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the management of ESOPs. For example, when employees participating in an ESOP at a closely held employer receive company stock in an ESOP distribution, they have the right to ask for 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. Usually, 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 evolves and matures, so will its implications for your company. ESOP advisors can plan for these changes and react to them in real time, allowing your plan to stay feasible, compliant, and profitable.
- Employee communication and education — Our ESOP advisors offer collective workshops and one-on-one meetings with your employees so they can optimize the advantages from your ESOP. With an ESOP advisor from Correct Capital, your employees won't just attain 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 Richmond Heights, 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 make us unique from other financial advisory firms in Richmond Heights, MO, and all over the U.S.:
- 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 when managing retirement plans, we're perfectly positioned to understand the demands of each and establish a plan that meets the necessities of both, as well as those of your stockholders.
- Our award-winning Richmond Heights, MO 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 80 years of combined experience, we pool our collective talents and insights to effectively cater to each client individually.
- As independent fiduciary advisors, we are lawfully and ethically bound to do what's in the optimal interest of you, your employees, and your company. We strive to form 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 Richmond Heights, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- Self-Employed Retirement Plans
- 401(k) For Small Business
Call Correct Capital to Speak With an ESOP Advisor in Richmond Heights, MO Today
If you're interested in learning more about ESOPs or wish to start the process of setting one up for your Richmond Heights, MO business, contact a Correct Capital ESOP advisor today. Let us do what we do best so you can focus on what you care about most: setting yourself, your business, and your employees up for prosperity. Reach out with one of our Richmond Heights, MO ESOP advisors immediately at 877-930-4015 or contact us online.
