ESOP advisor in St. Charles County, MO. Employee stock ownership plans (ESOPs) are becoming a more and more well-liked retirement plan for employees in a variety of sectors in St. Charles County, MO. They offer business owners an opportunity to pass the torch from their company while greatly 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 St. Charles County, MO business owners can do by themselves. Correct Capital's proficient and savvy ESOP advisors help businesses of all sizes, in St. Charles County, MO and around the nation, establish tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're seeking an experienced financial partner in St. Charles County, 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 right away.
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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 funds or investments in other companies as in a typical retirement plan. 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 superb incentives to employees while providing businesses with an improved value proposition to employees, and allow business owners to set up a succession plan while maintaining control. When they retire, most employees sell the stock at stock market value.
Of special interest to business owners, by transferring 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 having to pay taxes promptly. In many cases, ESOPs are a transition 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)
- Additional tax deductions through contributions made to employees
- If the business is one day 100% owned as an S-Corp by the ESOP, it's free from federal income taxes
- Align the goals of employees and stockholders
- Offer a higher value proposition when hiring
- Enhance employee motivation and productivity
- Boost employee retention and loyalty
- Simplify succession planning and business continuity
- Maintain control while organizing or easing into retirement
- Boost personal liquidity of owners, but still retain control of the company
- Preserve 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 extended to employees as in an ESOP, employees can deposit their own money to obtain additional shares through payroll deductions, or the company can match employee contributions with stock instead of 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 receive the benefits of both. The experienced St. Charles County, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the right plans for your business.
How Our St. Charles County, 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 St. Charles County, MO ESOP advisory firm by your side 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 sell your ownership shares to an ESOP, you can reinvest the proceeds in different securities to postpone capital gains taxes on the sales, permitting you to retain more of the sales proceeds for various 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 that money 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 get the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll develop and execute an ESOP suited specifically to you and your company. We like to test ourselves and our clients to get innovative with retirement plan offerings to optimize the advantages they offer. We'll assess your needs, assess various ESOP options, and suggest a personalized ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it'll work, we may also advise combining an ESOP with a 401(k) or alternative retirement plans to additionally boost benefits, yet retain efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to grasp their needs and work together with them to discover the optimal tax-advantaged retirement plans for their company. For clients interested in an ESOP, part of that means conducting a feasibility analysis to determine if it's a feasible option for your company. We'll look at:
- 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 determine 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 acquire stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in St. Charles County, MO can help you establish your ESOP team with dependable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict requirements for the administration of retirement 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 require the employer to repurchase them at current market price.
- 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 stages. 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 respond to them in real time, facilitating your plan to stay viable, compliant, and beneficial.
- Employee communication and education — Our ESOP advisors offer group sessions and one-on-one meetings with your employees so they can optimize the advantages from your employee stock ownership plan. With an ESOP advisor from Correct Capital, your employees won't just acquire 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 St. Charles County, MO
Correct Capital is an independent advisory firm that specializes in helping business owners establish retirement plans and succession plans for their businesses. There are multiple factors we believe set us apart from other financial consulting companies in St. Charles County, MO, and throughout the nation:
- We know 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 aid in setting up retirement plans, we're ideally suited to understand the requirements of each and create a plan that fulfills the necessities 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 best interest of you, your employees, and your company. We strive to establish long-term relationships with our clients grounded in trust and the mutual goal of growing your and your employees' financial prosperity.
Other services we offer in St. Charles County, MO:
Call Correct Capital to Speak With an ESOP Advisor in St. Charles County, MO Today
If you're interested in learning more about ESOPs or wish to initiate the process of setting one up for your St. Charles County, MO business, reach out to a Correct Capital ESOP advisor today. Let us do what we do best so you can focus on what you value most: positioning yourself, your business, and your employees up for success. Get in touch with one of our St. Charles County, MO ESOP advisors immediately at 877-930-4015 or contact us online.
