ESOP advisor in St. Louis Hills, MO. Employee stock ownership plans (ESOPs) are becoming a more and more common retirement plan for employees in a variety of sectors in St. Louis Hills, MO. They offer business owners an opportunity to move on from their company while considerably reducing taxes on the sale, and offer employees a qualified retirement plan that builds their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most St. Louis Hills, MO business owners can do without professional help. Correct Capital's proficient and savvy ESOP advisors help businesses of all sizes, in St. Louis Hills, MO and around the country, establish tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're in search of a trustworthy financial partner in St. Louis Hills, MO who shares your goals of building your company and employees for prolonged success, call Correct Capital at 877-930-4015, contact us online, or schedule a consultation with one of our financial advisors today.
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 funds or investments in other companies as in a typical retirement plan. ESOPs are 100% company funded, and often times shares offered to employees are not governing shares, meaning control of the company stays with the C-suite. They offer fantastic incentives to employees while providing businesses with an improved value proposition to employees, and allow business owners to set up a succession plan while retaining 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 spread out the tax consequences of the sale instead of being required to pay taxes promptly. In many cases, ESOPs are a transition plan that keeps the most amount of money achievable 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 free from federal income taxes
- Align the goals of employees and stockholders
- Provide a higher value proposition when hiring
- Increase employee motivation and productivity
- Improve 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
- Preserve your business' legacy and culture
What About KSOPs?
A KSOP is a tax-advantaged plan that is a combination of an ESOP and a 401(k). Ownership shares are given to employees as in an ESOP, employees can put in their own money to obtain additional stock through payroll deductions, or the company can match employee contributions with shares rather than cash.
Setting up a stock ownership plan doesn't have to exclude your employees from more diverse investments. In fact, adding an ESOP or KSOP to a more traditional retirement plan allows you to get the benefits of both. The experienced St. Louis Hills, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the best retirement plan for you, your company, and your employees.
How Our St. Louis Hills, MO ESOP Advisors Can Help
Whether you're moving on from ownership of your company or are interested in an ESOP's other benefits, you'll need an experienced St. Louis Hills, MO ESOP advisory firm in your corner to reap the most benefits 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 different securities to postpone capital gains taxes on the sales, permitting you to retain more of the sales proceeds for different 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 owed until the taxpayer has a sale of the QRP. An ESOP advisor can guarantee you get 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 that works best for you and your one-of-a-kind company. We like to challenge ourselves and our clients to get creative with retirement plan offerings to optimize the benefits they provide. We'll assess your needs, analyze several ESOP options, and propose a tailored ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it's a good idea, we may also suggest combining an ESOP with a 401(k) or different retirement plans to additionally boost 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 discover the best qualified retirement plans for their business. For clients interested in an ESOP, part of that means carrying out a feasibility analysis to establish if it's a feasible 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 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 CPAs, 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 Hills, MO can help you set up your ESOP team with dependable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the administration of ESOPs. For example, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the right to demand the employer to redeem 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. Usually, that means ownership of the company is sold 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 evolves and matures, so will its impact on your company. ESOP advisors can plan for these changes and respond to them in real time, enabling 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 attain a portion of your company, but they'll feel like they're obtaining ownership of their financial health and future.
Why Choose Correct Capital as Your ESOP Advisor in St. Louis Hills, 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 numerous factors we point to that distinguish us from other financial advisory firms in St. Louis Hills, MO, and throughout 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 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 requirements of each and develop a plan that meets the requirements of both, as well as those of your stockholders.
- Our award-winning St. Louis Hills, MO 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 optimally assist each client individually.
- 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 founded on trust and the common goal of expanding your and your employees' wealth.
Other services we offer in St. Louis Hills, 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 Hills, 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 Hills, MO business, reach out to a Correct Capital ESOP advisor at this moment. Let us do what we do best so you can focus on what you value most: positioning yourself, your business, and your employees up for achievement. Get in touch with one of our St. Louis Hills, MO ESOP advisors today at 877-930-4015 or contact us online.
