ESOP advisor in St. Charles, MO. Employee stock ownership plans (ESOPs) have become an increasingly common retirement plan for employees in various industries in St. Charles, 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 tax-advantaged retirement plan that increases their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most St. Charles, MO business owners can do by themselves. Correct Capital's knowledgeable and savvy ESOP advisors help businesses of all sizes, in St. Charles, MO and around the United States, establish tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're looking for 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 stock of the company they work for, rather than savings accounts 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 voting shares, meaning control of the company stays with ownership and other executives. They offer great incentives to employees while providing businesses with a better 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 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 that tax hit instead of having 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 exempt from federal income taxes
- Align the goals of employees and stockholders
- Offer a higher value proposition when hiring
- Increase employee motivation and productivity
- Enhance employee retention and loyalty
- Ease succession planning and business continuity
- Keep control while arranging or easing into retirement
- Increase personal liquidity of owners, but still hold on to control of the company
- Preserve 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 given 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 the risk tolerance that comes with 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, MO ESOP advisors and retirement consultants of Correct Capital can aid you find the best retirement plan for you, your company, and your employees.
What Our St. Charles, 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, MO ESOP advisory firm to partner with to get the most out 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 postpone capital gains taxes on the sales, allowing you to keep more of the profit. To defer 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 assure you receive the most tax benefit from your ESOP.
- Personalize 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 creative with retirement plan offerings to maximize the advantages they provide. We'll evaluate your needs, assess various ESOP options, and propose a personalized ESOP that meets legal requirements and is aimed at optimizing benefits. If it makes sense, we may also advise combining an ESOP with a 401(k) or alternative retirement plans to additionally augment benefits, yet retain efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to comprehend their needs and collaborate with them to discover the best tax-advantaged retirement plans for their company. For clients interested in an ESOP, part of that means conducting a feasibility analysis to establish if it's a workable option for your company. We'll examine:
- 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 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 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 arrange your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict guidelines for the administration of retirement plans. For example, 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 redeem them at fair market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on seniority of service. 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 evolves 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 feasible, compliant, and advantageous.
- Employee communication and education — Our ESOP advisors offer collective workshops 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 partial ownership of your company, but they'll feel like they're achieving 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 create retirement plans and succession plans for their companies. There are numerous factors we believe make us unique from other investment advisory agencies in St. Charles, 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 variety of industries, 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 perfectly positioned to understand the needs of each and create a plan that meets the necessities of both, as well as those of your stockholders.
- Our award-winning St. Charles, 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 optimally assist each client individually.
- As independent fiduciary advisors, we are legally and morally bound to do what's in the utmost benefit of you, your employees, and your company. We strive to forge long-term relationships with our clients grounded in trust and the shared goal of increasing your and your employees' financial prosperity.
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
Call Correct Capital to Speak With an ESOP Advisor in St. Charles, MO Today
If you're interested in learning more about ESOPs or wish to start 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 prioritize on what you care about most: establishing yourself, your business, and your employees up for prosperity. Get in touch with one of our St. Charles, MO ESOP advisors immediately at 877-930-4015 or contact us online.
