ESOP advisor in Rock Hill, MO. Employee stock ownership plans (ESOPs) are becoming a more and more common retirement benefit for employees in various industries in Rock Hill, MO. They offer business owners an opportunity to move on from their company while greatly reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that increases their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Rock Hill, MO business owners can do alone. Correct Capital's proficient and savvy ESOP advisors help businesses of all sizes, in Rock Hill, MO and around the nation, design tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're in search of a trustworthy financial partner in Rock Hill, MO who shares your goals of building your company and employees for prolonged 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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What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a tax-advantaged 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 fantastic 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 maintaining control. When they retire, most employees sell the stock at market value.
Perhaps most importantly, by selling part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to distribute that tax hit instead of needing to pay taxes at once. 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)
- 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
- Improve employee motivation and productivity
- Enhance employee retention and loyalty
- Enable succession planning and business continuity
- Maintain control while arranging or easing into retirement
- Amplify 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 extended to employees as in an ESOP, employees can put in their own money to purchase 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 the risk tolerance that comes with diverse investments. In fact, introducing an ESOP or KSOP to a more traditional retirement plan allows you to get the benefits of both. The experienced Rock Hill, MO ESOP advisors and retirement consultants of Correct Capital can aid you find the best retirement plan for you, your company, and your employees.
What Our Rock Hill, 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 an experienced Rock Hill, MO ESOP advisory firm by your side 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 other securities to postpone capital gains taxes on the sales, allowing you to keep more of the sales proceeds for other 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 sale of the QRP. An ESOP advisor can guarantee you get the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll design and execute an ESOP suited specifically to you and your company. We like to test ourselves and our clients to get creative with retirement plan offerings to enhance the benefits they offer. We'll examine your needs, assess different ESOP options, and suggest a customized ESOP that meets legal requirements and is aimed at maximizing benefits. If it makes sense, we may also advise combining an ESOP with a 401(k) or different retirement plans to additionally augment benefits, without sacrificing 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 optimal tax-advantaged retirement plans for their business. For clients interested in an ESOP, part of that means carrying out a feasibility analysis to establish 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 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 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 buy stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Rock Hill, 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 administration of employee stock ownership plans. For instance, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the option to ask for the employer to redeem them at fair 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 react to them in real time, allowing your plan to stay feasible, in accordance with regulations, and beneficial.
- Employee communication and education — Our ESOP advisors offer collective workshops and personalized meetings with your employees so they can maximize the benefits from your retirement plan. With an ESOP advisor from Correct Capital, your employees won't just get partial ownership of your company, but they'll feel like they're gaining ownership of their financial health and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Rock Hill, MO
Correct Capital is an independent advisory firm that specializes in helping business owners establish retirement plans and succession plans for their enterprises. There are multiple factors we believe make us unique from other financial advisory firms in Rock Hill, MO, and throughout the country:
- We're experienced in retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a variety of industries, including for construction companies and contractors. As we work with both businesses and individuals and families to aid in setting up retirement plans, we're well-prepared to understand the demands of each and establish a plan that fulfills the necessities of both, as well as those of your stockholders.
- As independent fiduciary advisors, we are lawfully and ethically bound to do what's in the best interest of you, your employees, and your company. We endeavor to establish long-term relationships with our clients based on trust and the shared goal of increasing your and your employees' monetary well-being.
Other services we offer in Rock Hill, MO:
Call Correct Capital to Speak With an ESOP Advisor in Rock Hill, MO Today
If you're interested in learning more about ESOPs or aspire to initiate the process of setting one up for your Rock Hill, MO business, contact a Correct Capital ESOP advisor today. Let us do what we do best so you can prioritize on what you value most: setting yourself, your business, and your employees up for achievement. Reach out with one of our Rock Hill, MO ESOP advisors today at 877-930-4015 or contact us online.
