ESOP advisor in St. Charles, MO. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement benefit for employees in a variety of sectors in St. Charles, MO. They offer business owners a chance to exit their company while substantially reducing taxes on the sale, and offer employees a qualified retirement plan that builds their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most St. Charles, MO business owners can do without professional help. Correct Capital's seasoned and savvy ESOP advisors help businesses of all sizes, in St. Charles, MO and around the country, establish tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're in search of an experienced financial partner in St. Charles, 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 right away.
What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a qualified retirement plan where employees receive shares of the company that employs them, 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 governing shares, meaning control of the company stays with ownership and other executives. They offer fantastic incentives to employees while providing businesses with a superior value proposition to employees, and allow business owners to set up a succession plan while retaining control. Upon reaching retirement, most employees sell the stock at market value 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 at once. In many cases, ESOPs are a transition 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 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
- Facilitate succession planning and business continuity
- Keep control while preparing or easing into retirement
- Increase personal liquidity of owners, but still keep 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 offered to employees as in an ESOP, employees can deposit their own money to buy additional shares through payroll deductions, or the company can match employee contributions with shares instead of cash.
Setting up a stock ownership plan doesn't have to exclude your employees from more 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 St. Charles, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the right plans for your business.
How Our St. Charles, 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, MO ESOP advisory firm in your corner 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 can reinvest the proceeds in alternative securities to defer capital gains taxes on the sales, permitting you to keep more of the profit. To defer capital gains taxes, your ESOP advisor can help you carry out 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 owed until the taxpayer has a sale of the QRP. An ESOP advisor can guarantee you obtain 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 push ourselves and our clients to get innovative with retirement plan offerings to maximize the benefits they offer. We'll assess your needs, analyze different ESOP options, and propose a customized ESOP that meets legal requirements and is aimed at maximizing benefits. If we believe it'll work, we may also suggest combining an ESOP with a 401(k) or different retirement plans to further increase benefits, without sacrificing 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 optimal tax-advantaged retirement plans for their company. For clients looking at an ESOP, part of that means carrying out 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 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 CPAs, attorneys, 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, MO can help you establish your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the administration of employee stock ownership plans. For example, when employees participating in an ESOP at a closely held employer receive company stock in an ESOP distribution, they have the option to demand the employer to repurchase them at market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on length of service. Usually, 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 evolves and matures, so will its impact on your company. ESOP advisors can plan for these changes and respond to them in real time, enabling your plan to stay workable, compliant, and profitable.
- 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 retirement plan. With an ESOP advisor from Correct Capital, your employees won't just acquire a portion of your company, but they'll feel like they're gaining ownership of their economic well-being and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in St. Charles, MO
Correct Capital is an independent advisory firm that specializes in assisting 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, MO, and throughout the United States:
- 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're experienced in 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 to support in setting up retirement plans, we're ideally suited to understand the requirements of each and establish a plan that satisfies the needs of both, as well as those of your stockholders.
- Our award-winning St. Charles, MO financial advisory team is composed 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 effectively cater to each client individually.
- As independent fiduciary advisors, we are lawfully and ethically 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 mutual goal of growing your and your employees' monetary well-being.
Other services we offer in St. Charles, 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, MO Today
If you're interested in learning more about ESOPs or aspire to commence the process of setting one up for your St. Charles, MO business, get in touch with a Correct Capital ESOP advisor today. Let us do what we do best so you can concentrate on what you care about most: establishing yourself, your business, and your employees up for success. Reach out with one of our St. Charles, MO ESOP advisors today at 877-930-4015 or contact us online.
