ESOP advisor in St. Louis County, MO. Employee stock ownership plans (ESOPs) are becoming a more and more common retirement benefit for employees in various industries in St. Louis County, MO. They offer business owners a chance to move on from their company while substantially reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that builds their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most St. Louis County, MO business owners can do alone. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in St. Louis County, MO and around the nation, create tailored retirement plans that benefit themselves, their employees, and their profit.
If you're seeking a trustworthy financial partner in St. Louis County, MO who shares your goals of setting up your company and employees for sustained success, call Correct Capital at 314-930-4015, 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 that employs them, 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 voting shares, meaning control of the company stays with the C-suite. They offer superb incentives to employees while providing businesses with an improved 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 market value value.
Perhaps most importantly, by selling 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 promptly. In many cases, ESOPs are a transition plan that keeps the most amount of money attainable with the owner.
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 free from federal income taxes
- Align the goals of employees and stockholders
- Provide a higher value proposition when hiring
- Boost employee motivation and productivity
- Enhance employee retention and loyalty
- Facilitate succession planning and business continuity
- Keep control while planning or easing into retirement
- Boost personal liquidity of owners, but still retain control of the company
- Carry on 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 purchase 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 the risk tolerance that comes with diverse investments. In fact, incorporating an ESOP or KSOP to a more traditional retirement plan allows you to obtain the benefits of both. The experienced St. Louis County, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the best retirement plan for you, your company, and your employees.
What Our St. Louis County, MO ESOP Advisors Do for You
Whether you're stepping from control of your company or are interested in an ESOP's other benefits, you'll need an experienced St. Louis County, 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 sell 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 postpone 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 that money 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 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 test ourselves and our clients to get innovative with retirement plan offerings to maximize the advantages they offer. We'll assess your needs, analyze different ESOP options, and propose a tailored ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it'll work, we may also advise combining an ESOP with a 401(k) or different retirement plans to further augment benefits, yet retain efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to understand their needs and collaborate with them to find the best qualified retirement plans for their company. For clients looking at an ESOP, part of that means conducting a feasibility analysis to determine if it's a feasible option for your company. We'll look at:
- 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, lawyers, and a trustee to acquire stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in St. Louis County, MO can help you set up your ESOP team with dependable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict guidelines for the management of retirement plans. For instance, when employees participating in an ESOP at a closely held employer receive company stock in an ESOP distribution, they have the option to require the employer to redeem them at current market price.
- 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 passed 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 progresses and matures, so will its impact on your company. ESOP advisors can plan for these changes and react to them in real time, allowing your plan to stay viable, in accordance with regulations, and beneficial.
- Employee communication and education — Our ESOP advisors offer group sessions and personalized meetings with your employees so they can optimize the advantages from your employee stock ownership plan. With an ESOP advisor from Correct Capital, your employees won't just get partial ownership of your company, but they'll feel like they're gaining ownership of their financial health and future.
Why Choose Correct Capital as Your ESOP Advisor in St. Louis County, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners arrange retirement plans and succession plans for their enterprises. There are several factors we point to that set us apart from other financial advisory firms in St. Louis County, MO, and across the U.S.:
- 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 industries, 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 perfectly positioned to understand the demands of each and develop a plan that meets the requirements of both, as well as those of your stockholders.
- Our award-winning St. Louis County, MO financial advisory team is made up 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 eight decades of combined experience, we pool our collective talents and insights to effectively cater to each client distinctively.
- As independent fiduciary advisors, we are legally and ethically bound to do what's in the optimal interest of you, your employees, and your company. We endeavor to form long-term relationships with our clients grounded in trust and the shared goal of growing your and your employees' wealth.
Other services we offer in St. Louis County, MO:
- 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
- Retirement Planning
- Rollover 401(k)
Call Correct Capital to Speak With an ESOP Advisor in St. Louis County, MO Today
If you're interested in learning more about ESOPs or wish to commence the process of setting one up for your St. Louis County, MO business, reach out to a Correct Capital ESOP advisor now. Let us do what we do best so you can prioritize on what you value most: positioning yourself, your business, and your employees up for prosperity. Get in touch with one of our St. Louis County, MO ESOP advisors immediately at 314-930-4015 or contact us online.