ESOP advisor in St. Louis County, MO. Employee stock ownership plans (ESOPs) have become an increasingly well-liked retirement benefit for employees in a variety of sectors in St. Louis County, 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 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 proficient and savvy ESOP advisors help businesses of all sizes, in St. Louis County, MO and around the United States, design tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're in search of an experienced financial partner in St. Louis County, MO who shares your goals of creating your company and employees for enduring success, call Correct Capital at 877-930-4015, contact us online, or schedule an appointment with one of our financial advisors at this moment.
What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a qualified retirement plan where employees receive shares of the company that employs them, rather than savings accounts 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 fantastic incentives to employees while providing businesses with a superior value proposition in the hiring process, and allow business owners to set up a succession plan while maintaining control. Upon reaching retirement, most employees sell the stock at stock market value.
Perhaps most importantly, by handing over part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to allocate that tax hit instead of having to pay taxes immediately. 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)
- Extra 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
- Offer a higher value proposition when hiring
- Enhance employee motivation and productivity
- Enhance employee retention and loyalty
- Ease succession planning and business continuity
- Maintain control while organizing or easing into retirement
- Raise personal liquidity of owners, but still retain 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 provided to employees as in an ESOP, employees can add their own money to obtain 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, introducing 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 aid you find the right plans for your business.
What Our St. Louis County, 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 an experienced St. Louis County, MO ESOP advisory firm in your corner to get the most out 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 different securities to defer capital gains taxes on the sales, permitting you to keep 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 the proceeds 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 set up an ESOP that works best for you and your unique company. We like to challenge ourselves and our clients to get imaginative with retirement plan offerings to maximize the advantages they offer. We'll examine your needs, analyze 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 recommend combining an ESOP with a 401(k) or alternative retirement plans to additionally boost benefits, yet retain efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to grasp their needs and collaborate with them to identify the best qualified retirement plans for their company. For clients interested in an ESOP, part of that means performing a feasibility analysis to ascertain if it's a workable option for your company. We'll analyze:
- 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 partner 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 purchase 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 arrange your ESOP team with dependable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict requirements for the oversight of retirement plans. For example, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the right to require the employer to buy back them at 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 phases. 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 impact on your company. ESOP advisors can plan for these changes and respond to them in real time, facilitating your plan to stay workable, in accordance with regulations, and profitable.
- Employee communication and education — Our ESOP advisors offer collective workshops and one-on-one meetings with your employees so they can maximize the benefits from your ESOP. 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 obtaining ownership of their economic well-being and eventual retirement.
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 companies. There are several factors we believe make us unique from other financial advisory firms in St. Louis County, 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'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 to assist in setting up retirement plans, we're perfectly positioned to understand the requirements of each and develop a plan that satisfies the requirements of both, as well as those of your stockholders.
- Our award-winning St. Louis County, MO financial advisory team is composed 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 distinctively.
- As independent fiduciary advisors, we are lawfully and ethically 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 grounded in trust and the mutual goal of growing your and your employees' monetary well-being.
Other services we offer in St. Louis County, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- Self-Employed Retirement Plans
- 401(k) For Small Business
- Small Business Retirement Plans
- Tax Planning
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, contact a Correct Capital ESOP advisor now. Let us do what we do best so you can focus on what you care about most: setting yourself, your business, and your employees up for success. Get in touch with one of our St. Louis County, MO ESOP advisors immediately at 877-930-4015 or contact us online.
