ESOP advisor in Shrewsbury, MO. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement plan for employees in various industries in Shrewsbury, MO. They offer business owners a chance to step away from their company while substantially reducing taxes on the sale, and offer employees a qualified retirement plan that increases their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Shrewsbury, MO business owners can do alone. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in Shrewsbury, 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 Shrewsbury, MO who shares your goals of creating 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 immediately.
About Employee Stock Ownership Plans (ESOPs)
An ESOP is a qualified 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 governing shares, meaning control of the company stays with ownership and other executives. They offer great incentives to employees while providing businesses with an improved value proposition to employees, and allow business owners to set up a succession plan while preserving control. When they retire, most employees sell the stock at market 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 spread out that tax hit instead of needing to pay taxes right away. In many cases, ESOPs are a transition plan that keeps the most amount of money feasible 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 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
- Simplify succession planning and business continuity
- Maintain control while preparing or easing into retirement
- Increase 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 tax-advantaged plan that is a combination of an ESOP and a 401(k). Ownership shares are offered to employees as in an ESOP, employees can put in their own money to acquire additional shares 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 attain the benefits of both. The experienced Shrewsbury, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the best retirement plan for you, your business, and your employees.
How Our Shrewsbury, MO ESOP Advisors Can Help
Whether you're moving on from ownership of your company or are interested in an ESOP's other benefits, you'll need a knowledgeable Shrewsbury, MO ESOP advisory firm to partner with to reap the most benefits 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 have the option to reinvest the proceeds in other securities to defer capital gains taxes on the sales, permitting 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 ensure you receive the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll create and implement an ESOP that works best for you and your unique company. We like to challenge ourselves and our clients to get creative with retirement plan offerings to optimize the benefits they provide. We'll examine your needs, evaluate several ESOP options, and propose 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 further boost benefits, yet retain efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to comprehend their needs and work together with them to identify the best qualified retirement plans for their business. For clients interested in an ESOP, part of that means performing a feasibility analysis to determine 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 how they're best served
- 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 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, lawyers, and a trustee to buy stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Shrewsbury, MO can help you arrange your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the oversight 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 option to require the employer to repurchase 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 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 impact on your company. ESOP advisors can plan for these changes and react to them in real time, enabling 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 maximize the benefits from your employee stock ownership plan. 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 gaining ownership of their financial health and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Shrewsbury, MO
Correct Capital is an independent advisory firm that specializes in helping business owners create retirement plans and succession plans for their enterprises. There are several factors we believe distinguish us from other financial advisory firms in Shrewsbury, MO, and across the U.S.:
- 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 requirements of each and develop a plan that satisfies the requirements of both, as well as those of your stockholders.
- As independent fiduciary advisors, we are legally and morally 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 Shrewsbury, MO:
Call Correct Capital to Speak With an ESOP Advisor in Shrewsbury, MO Today
If you're interested in learning more about ESOPs or wish to initiate the process of setting one up for your Shrewsbury, MO business, get in touch with a Correct Capital ESOP advisor now. Let us do what we do best so you can concentrate on what you value most: establishing yourself, your business, and your employees up for success. Get in touch with one of our Shrewsbury, MO ESOP advisors now at 877-930-4015 or contact us online.
