ESOP advisor in St. Charles County, MO. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement benefit for employees in various industries in St. Charles County, 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 increases their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most St. Charles County, MO business owners can do without professional help. Correct Capital's knowledgeable 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 bottom line.
If you're looking for a trustworthy financial partner in St. Charles County, 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 an appointment with one of our financial advisors today.
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 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 ownership and other executives. 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. Upon reaching retirement, most employees sell the stock at market value.
Perhaps most importantly, by transferring part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to allocate that tax hit instead of being required to pay taxes right away. 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)
- Extra 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
- Enhance employee retention and loyalty
- Ease succession planning and business continuity
- Maintain control while arranging or easing into retirement
- Amplify 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 mix between an ESOP and a 401(k). Ownership shares are offered to employees as in an ESOP, employees can deposit their own money to buy 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, including an ESOP or KSOP to a more traditional retirement plan allows you to get 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.
What Our St. Charles County, 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 a knowledgeable St. Charles County, MO ESOP advisory firm by your side 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 transfer your ownership shares to an ESOP, you can reinvest the proceeds in alternative securities to postpone capital gains taxes on the sales, allowing you to keep more of the sales proceeds for different 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 disposition 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 one-of-a-kind company. We like to challenge ourselves and our clients to get imaginative with retirement plan offerings to enhance the benefits they provide. We'll assess your needs, analyze various ESOP options, and suggest a customized 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 augment 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 find the best qualified retirement plans for their company. For clients interested in an ESOP, part of that means conducting a feasibility analysis to ascertain if it's a workable 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 what they need from their retirement plan
- 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 work 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 accountants, lawyers, and a trustee to purchase 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 regulations for the administration of ESOPs. 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 repurchase them at current market price.
- 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 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 adapt to them in real time, enabling your plan to stay viable, in accordance with regulations, and beneficial.
- Employee communication and education — Our ESOP advisors offer collective workshops and one-on-one 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 get a share of your company, but they'll feel like they're gaining ownership of their economic well-being and future.
Why Choose Correct Capital as Your ESOP Advisor in St. Charles County, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners establish retirement plans and succession plans for their enterprises. There are multiple factors we point to that make us unique from other investment advisory agencies in St. Charles County, MO, and across the country:
- 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 know retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a range of sectors, including for construction companies and contractors. As we work with both businesses and individuals and families when managing retirement plans, we're ideally suited to understand the needs of each and establish a plan that fulfills the needs of both, as well as those of your stockholders.
- Our award-winning St. Charles County, MO financial advisory team is made up of a diverse 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 eight decades of combined experience, we pool our collective talents and insights to best serve each client uniquely.
- As independent fiduciary advisors, we are lawfully and morally bound to do what's in the utmost benefit of you, your employees, and your company. We aim to form long-term relationships with our clients grounded in trust and the shared goal of expanding your and your employees' wealth.
Other services we offer in St. Charles County, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
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 aspire to start the process of setting one up for your St. Charles County, 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: setting yourself, your business, and your employees up for achievement. Contact with one of our St. Charles County, MO ESOP advisors today at 877-930-4015 or contact us online.
