ESOP advisor in Sappington, MO. Employee stock ownership plans (ESOPs) have become an increasingly common retirement benefit for employees in a variety of sectors in Sappington, MO. They offer business owners a chance to exit their company while significantly reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that builds their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most Sappington, MO business owners can do without professional help. Correct Capital's seasoned and savvy ESOP advisors help businesses of all sizes, in Sappington, MO and around the United States, create tailored retirement plans that benefit themselves, their employees, and their profit.
If you're seeking an experienced financial partner in Sappington, 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 immediately.
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About Employee Stock Ownership Plans (ESOPs)
An ESOP is a tax-advantaged 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 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 a better value proposition to employees, and allow business owners to set up a succession plan while maintaining 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 distribute the tax consequences of the sale instead of being required to pay taxes right away. 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 not subject to federal income taxes
- Align the goals of employees and stockholders
- Offer a higher value proposition when hiring
- Enhance employee motivation and productivity
- Enhance employee retention and loyalty
- Simplify succession planning and business continuity
- Retain control while planning or easing into retirement
- Boost personal liquidity of owners, but still retain control of the company
- Carry on your business' legacy and culture
What About KSOPs?
A KSOP is a tax-advantaged plan that is a mix between an ESOP and a 401(k). Ownership shares are offered to employees as in an ESOP, employees can contribute 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 the risk tolerance that comes with diverse investments. In fact, including an ESOP or KSOP to a more traditional retirement plan allows you to obtain the benefits of both. The experienced Sappington, MO ESOP advisors and retirement consultants of Correct Capital can help you find the right plans for your business.
What Our Sappington, MO ESOP Advisors Do for You
Whether you're moving on from control of your company or are interested in an ESOP's other benefits, you'll need an experienced Sappington, 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 transfer 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 postpone capital gains taxes, your ESOP advisor can help you perform 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 ensure you receive the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll develop and set up 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 provide. We'll evaluate your needs, evaluate different ESOP options, and propose a tailored ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it's a good idea, we may also recommend combining an ESOP with a 401(k) or alternative retirement plans to further boost benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to grasp their needs and collaborate with them to discover the best tax-advantaged retirement plans for their business. For clients looking at an ESOP, part of that means conducting a feasibility analysis to establish if it's a feasible 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 how they're best served
- 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, attorneys, and a trustee to buy stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Sappington, MO can help you arrange your ESOP team with dependable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict guidelines for the administration of employee stock ownership plans. For instance, when employees participating in an ESOP 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 market value.
- 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 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 develops and matures, so will its impact on your company. ESOP advisors can plan for these changes and respond to them in real time, facilitating your plan to stay workable, compliant, and advantageous.
- Employee communication and education — Our ESOP advisors offer group meetings and personalized 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 economic well-being and future.
Why Choose Correct Capital as Your ESOP Advisor in Sappington, MO
Correct Capital is an independent advisory firm that specializes in helping business owners arrange retirement plans and succession plans for their companies. There are multiple factors we believe make us unique from other financial consulting companies in Sappington, MO, and across the nation:
- 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 ideally suited to understand the demands of each and develop a plan that fulfills the necessities of both, as well as those of your stockholders.
- As independent fiduciary advisors, we are legally and ethically 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 founded on trust and the common goal of increasing your and your employees' wealth.
Other services we offer in Sappington, MO:
Call Correct Capital to Speak With an ESOP Advisor in Sappington, MO Today
If you're interested in learning more about ESOPs or wish to start the process of setting one up for your Sappington, MO business, reach out to a Correct Capital ESOP advisor now. 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 Sappington, MO ESOP advisors today at 877-930-4015 or contact us online.
