ESOP advisor in St. Clair County, IL. Employee stock ownership plans (ESOPs) are becoming a more and more common retirement plan for employees in various industries in St. Clair County, IL. They offer business owners a chance to transition from their company while greatly reducing taxes on the sale, and offer employees a qualified retirement plan that increases their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most St. Clair County, IL business owners can do alone. Correct Capital's seasoned 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 looking for a trustworthy financial partner in St. Clair County, IL who shares your goals of building 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 immediately.
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About Employee Stock Ownership Plans (ESOPs)
An ESOP is a qualified retirement plan where employees receive shares of the company they work for, rather than savings funds 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 controlling shares, meaning control of the company stays with the C-suite. They offer superb incentives to employees while providing businesses with an enhanced value proposition to employees, and allow business owners to set up a succession plan while maintaining control. Upon reaching retirement, most employees sell the stock at marketplace 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 distribute the tax consequences of the sale instead of having to pay taxes immediately. In many cases, ESOPs are a transition plan that keeps the most amount of money attainable 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)
- Further 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
- Provide a higher value proposition when hiring
- Boost employee motivation and productivity
- Boost employee retention and loyalty
- Enable succession planning and business continuity
- Retain control while preparing or easing into retirement
- Increase personal liquidity of owners, but still keep control of the company
- Carry on your business' legacy and culture
What About KSOPs?
A KSOP is a qualified plan that is a combination of an ESOP and a 401(k). Ownership shares are provided to employees as in an ESOP, employees can deposit their own money to acquire 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, including 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.
What Our St. Clair County, IL ESOP Advisors Do for You
Whether you're stepping from ownership of your company or are interested in an ESOP's other benefits, you'll need an experienced 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 have the option to reinvest the proceeds in other securities to postpone capital gains taxes on the sales, allowing you to retain 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 payable until the taxpayer has a disposition of the QRP. An ESOP advisor can ensure 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 suited specifically to you and your company. We like to challenge ourselves and our clients to get imaginative with retirement plan offerings to optimize the benefits they offer. We'll assess your needs, assess different ESOP options, and recommend 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 increase 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 find the best qualified retirement plans for their company. For clients looking at an ESOP, part of that means performing a feasibility analysis to determine 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 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 accountants, lawyers, and a trustee to buy 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 set up your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict requirements for the oversight of employee stock ownership plans. For instance, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the option to ask for the employer to redeem them at current market price.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on duration 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 implications for your company. ESOP advisors can plan for these changes and respond to them in real time, allowing your plan to stay workable, compliant, and advantageous.
- Employee communication and education — Our ESOP advisors offer group sessions 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 attain a share 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 assisting business owners create retirement plans and succession plans for their businesses. There are several factors we point to that set us apart from other financial consulting companies in St. Clair County, IL, and all over the country:
- We know retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a wide range 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 requirements of each and establish a plan that meets the requirements of both, as well as those of your stockholders.
- As independent fiduciary advisors, we are lawfully and morally bound to do what's in the best interest of you, your employees, and your company. We aim to forge long-term relationships with our clients founded on trust and the common goal of increasing your and your employees' monetary well-being.
Other services we offer in St. Clair County, IL:
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, contact a Correct Capital ESOP advisor today. Let us do what we do best so you can prioritize on what you care about most: positioning yourself, your business, and your employees up for achievement. Reach out with one of our St. Clair County, IL ESOP advisors now at 877-930-4015 or contact us online.
