ESOP advisor in St. Clair County, IL. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement plan for employees in various industries in St. Clair County, IL. They offer business owners a chance to transition from their company while considerably 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. Clair County, IL business owners can do by themselves. Correct Capital's proficient and savvy ESOP advisors help businesses of all sizes, in St. Clair County, IL and around the country, establish tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're in search of an experienced financial partner in St. Clair County, IL who shares your goals of creating your company and employees for enduring success, call Correct Capital at 314-930-4015, contact us online, or schedule a consultation with one of our financial advisors at this moment.
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 funds 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 decision-making shares, meaning control of the company stays with the C-suite. They offer excellent incentives to employees while providing businesses with a better value proposition to employees, and allow business owners to set up a succession plan while preserving control. Upon reaching retirement, most employees sell the stock at stock market value.
Of special interest to business owners, by selling 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 needing to pay taxes at once. In many cases, ESOPs are a transition plan that keeps the most amount of money possible 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 exempt from federal income taxes
- Align the goals of employees and stockholders
- Provide a higher value proposition when hiring
- Boost employee motivation and productivity
- Boost employee retention and loyalty
- Enable succession planning and business continuity
- Maintain control while planning or easing into retirement
- Raise 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 put in their own money to purchase 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 the risk tolerance that comes with diverse investments. In fact, incorporating an ESOP or KSOP to a more traditional retirement plan allows you to attain the benefits of both. The experienced St. Clair County, IL ESOP advisors and retirement consultants of Correct Capital can support you find the best retirement plan for you, your company, and your employees.
How Our St. Clair County, IL ESOP Advisors Can Help
Whether you're stepping from control of your company or are interested in an ESOP's other benefits, you'll need a knowledgeable St. Clair County, IL ESOP advisory firm to partner with 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 other securities to defer 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 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 obtain the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll develop and set up an ESOP suited specifically to you and your company. We like to push ourselves and our clients to get creative with retirement plan offerings to optimize the benefits they offer. We'll examine your needs, assess various ESOP options, and propose a personalized ESOP that meets legal requirements and is aimed at maximizing benefits. If it makes sense, we may also suggest 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 work together with them to identify the best qualified retirement plans for their business. For clients looking at an ESOP, part of that means carrying out a feasibility analysis to ascertain if it's a viable 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 what they need from their retirement plan
- 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 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. Clair County, IL can help you arrange your ESOP team with dependable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the management of employee stock ownership plans. For example, 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 redeem them at fair market value.
- 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, allowing your plan to stay workable, compliant, and profitable.
- Employee communication and education — Our ESOP advisors offer group meetings and individual consultations with your employees so they can maximize the benefits from your ESOP. 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 achieving ownership of their financial stability and future.
Why Choose Correct Capital as Your ESOP Advisor in St. Clair County, IL
Correct Capital is an independent advisory firm that specializes in helping business owners arrange retirement plans and succession plans for their businesses. There are several factors we believe set us apart from other financial advisory firms in St. Clair County, IL, and all over the nation:
- 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 wide 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 create a plan that meets the requirements of both, as well as those of your stockholders.
- Our award-winning St. Clair County, IL financial advisory team is composed of a wide 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 80 years of combined experience, we pool our collective talents and insights to best serve each client uniquely.
- 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 form long-term relationships with our clients founded on trust and the mutual goal of growing your and your employees' wealth.
Other services we offer in St. Clair County, IL:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
- Social Security Consultants Near Me
- Retirement Calculator
Call Correct Capital to Speak With an ESOP Advisor in St. Clair County, IL Today
If you're interested in learning more about ESOPs or desire to initiate the process of setting one up for your St. Clair County, IL business, reach out to a Correct Capital ESOP advisor at this moment. Let us do what we do best so you can prioritize on what you value most: setting yourself, your business, and your employees up for success. Reach out with one of our St. Clair County, IL ESOP advisors today at 314-930-4015 or contact us online.