ESOP advisor in St. Louis, MO. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement plan for employees in a variety of sectors in St. Louis, MO. They offer business owners a chance to exit their company while substantially reducing taxes on the sale, and offer employees a qualified retirement plan that increases their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most St. Louis, MO business owners can do without professional help. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in St. Louis, MO and around the nation, develop tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're seeking a trustworthy financial partner in St. Louis, MO who shares your goals of building your company and employees for sustained success, call Correct Capital at 877-930-4015, contact us online, or schedule a consultation with one of our financial advisors now.
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 such as in a 401(k). ESOPs are fully funded by the employer, and often times shares offered to employees are not decision-making shares, meaning control of the company stays with the C-suite. They offer great incentives to employees while providing businesses with a better value proposition to employees, and allow business owners to set up a succession plan while preserving control. When they retire, most employees sell the stock at market value.
Of special interest to business owners, by handing over part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to distribute that tax hit instead of having to pay taxes at once. In many cases, ESOPs are a succession 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 eventually 100% owned as an S-Corp by the ESOP, it's not subject to federal income taxes
- Align the goals of employees and stockholders
- Offer a higher value proposition when hiring
- Boost employee motivation and productivity
- Improve employee retention and loyalty
- Ease succession planning and business continuity
- Retain control while arranging or easing into retirement
- Raise 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 given to employees as in an ESOP, employees can put in their own money to obtain additional shares through payroll deductions, or the company can match employee contributions with stock rather than cash.
Setting up a stock ownership plan doesn't have to exclude your employees from more 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, MO ESOP advisors and retirement consultants of Correct Capital can support you find the right plans for your business.
How Our St. Louis, MO ESOP Advisors Can Help
Whether you're stepping from ownership of your company or are interested in an ESOP's other benefits, you'll need a knowledgeable St. Louis, MO ESOP advisory firm by your side 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 have the option to reinvest the proceeds in different securities to postpone capital gains taxes on the sales, allowing you to keep more of the profit. To defer capital gains taxes, your ESOP advisor can help you perform 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 payable 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 suited specifically to you and your company. We like to push ourselves and our clients to get creative with retirement plan offerings to enhance the benefits they offer. We'll evaluate your needs, evaluate different ESOP options, and recommend a customized ESOP that meets legal requirements and is aimed at maximizing 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 boost benefits, without sacrificing 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 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 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 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 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 buy stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in St. Louis, MO can help you establish your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the management of ESOPs. For instance, when individuals enrolled in an employee stock ownership plan at a closely held employer receive company stock in an ESOP distribution, they have the right to ask for the employer to repurchase 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 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 develops and matures, so will its implications for your company. ESOP advisors can plan for these changes and respond to them in real time, enabling your plan to stay viable, compliant, and profitable.
- Employee communication and education — Our ESOP advisors offer group sessions and one-on-one meetings with your employees so they can optimize the advantages from your retirement plan. With an ESOP advisor from Correct Capital, your employees won't just acquire a share of your company, but they'll feel like they're gaining ownership of their economic well-being and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in St. Louis, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners create retirement plans and succession plans for their enterprises. There are multiple factors we believe set us apart from other investment advisory agencies in St. Louis, MO, and throughout the country:
- We know retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a range 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 establish a plan that meets the necessities 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 form long-term relationships with our clients based on trust and the mutual goal of growing your and your employees' wealth.
Other services we offer in St. Louis, MO:
- 401(k) Audit
- High-Net-Worth Wealth Management
- Retirement Planner
- Financial Planning
- Retirement Plan Consultants
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- Self-Employed Retirement Plans
Call Correct Capital to Speak With an ESOP Advisor in St. Louis, MO Today
If you're interested in learning more about ESOPs or desire to commence the process of setting one up for your St. Louis, 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 care about most: positioning yourself, your business, and your employees up for achievement. Contact with one of our St. Louis, MO ESOP advisors immediately at 877-930-4015 or contact us online.
