ESOP advisor in St. Louis County, MO. Employee stock ownership plans (ESOPs) have become an increasingly well-liked retirement plan for employees in various industries in St. Louis County, MO. They offer business owners an opportunity to pass the torch from their company while significantly 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. Louis County, MO business owners can do by themselves. Correct Capital's proficient and savvy ESOP advisors help businesses of all sizes, in St. Louis County, MO and around the country, create tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're in search of a trustworthy financial partner in St. Louis County, MO who shares your goals of setting up your company and employees for long-term success, call Correct Capital at 877-930-4015, contact us online, or schedule a consultation with one of our financial advisors immediately.
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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 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 voting 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. When they retire, most employees sell the stock at market value 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 that tax hit instead of needing to pay taxes right away. In many cases, ESOPs are a transition plan that keeps the most amount of money feasible 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)
- 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
- Present a higher value proposition when hiring
- Improve employee motivation and productivity
- Boost employee retention and loyalty
- Enable succession planning and business continuity
- Maintain control while planning or easing into retirement
- Boost personal liquidity of owners, but still keep control of the company
- Preserve your business' legacy and culture
What About KSOPs?
A KSOP is a qualified plan that is a mix between an ESOP and a 401(k). Ownership shares are offered to employees as in an ESOP, employees can add their own money to buy additional stock through payroll deductions, or the company can match employee contributions with stock 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, including an ESOP or KSOP to a more traditional retirement plan allows you to receive 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 moving on from ownership of your company or are interested in an ESOP's other benefits, you'll need a knowledgeable St. Louis County, 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, permitting you to retain more of the profit. To postpone 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 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 design and set up 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 provide. We'll assess your needs, evaluate various ESOP options, and suggest a customized ESOP that meets legal requirements and is aimed at maximizing benefits. If we believe it'll work, we may also recommend combining an ESOP with a 401(k) or different 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 collaborate with them to find the optimal tax-advantaged retirement plans for their business. For clients looking at an ESOP, part of that means performing 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 the implications of 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 determine 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, attorneys, 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 establish your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict requirements for the administration of retirement plans. For example, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the option to demand the employer to buy back them at fair market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on how long they've worked there. Most of the time, that means ownership of the company is passed 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 develops and matures, so will its implications for your company. ESOP advisors can plan for these changes and react to them in real time, enabling your plan to stay workable, compliant, and advantageous.
- Employee communication and education — Our ESOP advisors offer group meetings and one-on-one meetings with your employees so they can optimize the advantages from your ESOP. With an ESOP advisor from Correct Capital, your employees won't just get a portion of your company, but they'll feel like they're gaining ownership of their financial stability 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 helping business owners arrange retirement plans and succession plans for their businesses. There are several factors we point to that make us unique from other investment advisory agencies in St. Louis County, MO, and throughout the nation:
- We're experienced in retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a variety of sectors, including for construction companies and contractors. As we work with both businesses and individuals and families when managing retirement plans, we're perfectly positioned to understand the requirements of each and establish a plan that fulfills the requirements of both, as well as those of your stockholders.
- 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 endeavor to establish long-term relationships with our clients founded on trust and the shared goal of increasing your and your employees' monetary well-being.
Other services we offer in St. Louis County, MO:
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 aspire to start the process of setting one up for your St. Louis County, MO 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 care about most: positioning yourself, your business, and your employees up for prosperity. Reach out with one of our St. Louis County, MO ESOP advisors immediately at 877-930-4015 or contact us online.
