ESOP advisor in St. Louis, MO. Employee stock ownership plans (ESOPs) have become an increasingly popular retirement plan for employees in various industries in St. Louis, MO. They offer business owners an opportunity to step away from their company while substantially reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that builds their investment in your company. 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 country, create tailored retirement plans that benefit themselves, their employees, and their profit.
If you're in search of a trustworthy financial partner in St. Louis, MO who shares your goals of creating your company and employees for prolonged success, call Correct Capital at 314-930-4015, contact us online, or schedule an appointment with one of our financial advisors at this moment.
About Employee Stock Ownership Plans (ESOPs)
An ESOP is a qualified retirement plan where employees receive shares of the company they work for, rather than savings accounts 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 decision-making 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 in the hiring process, and allow business owners to set up a succession plan while retaining control. Upon reaching retirement, most employees sell the stock at stock 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 disperse the tax consequences of the sale instead of needing to pay taxes right away. In many cases, ESOPs are a transition plan that keeps the most amount of money attainable 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)
- Further tax deductions through contributions made to employees
- If the business is eventually 100% owned as an S-Corp by the ESOP, it's exempt from federal income taxes
- Align the goals of employees and stockholders
- Offer a higher value proposition when hiring
- Enhance employee motivation and productivity
- Improve employee retention and loyalty
- Simplify succession planning and business continuity
- Maintain control while preparing 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 tax-advantaged plan that is a mix between an ESOP and a 401(k). Ownership shares are extended to employees as in an ESOP, employees can put in their own money to purchase additional stock 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 more diverse investments. In fact, introducing an ESOP or KSOP to a more traditional retirement plan allows you to attain the benefits of both. The experienced St. Louis, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the right plans for your business.
What Our St. Louis, 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 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:
- Minimize your tax liability as much as possible — When you transfer your ownership shares to an ESOP, you can reinvest the proceeds in alternative securities to postpone capital gains taxes on the sales, permitting you to retain more of the profit. 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 that money in qualified replacement securities or QRP. Taxes would be payable until the taxpayer has a disposition of the QRP. An ESOP advisor can guarantee you receive the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll develop and execute an ESOP that works best for you and your unique company. We like to push ourselves and our clients to get imaginative with retirement plan offerings to maximize the benefits they offer. We'll examine your needs, evaluate several ESOP options, and suggest a customized 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 other retirement plans to further increase benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to comprehend their needs and collaborate with them to identify 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 workable 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 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 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 guidelines for the oversight of ESOPs. For instance, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the option to require 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 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 react to them in real time, allowing your plan to stay workable, compliant, and beneficial.
- 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 retirement plan. With an ESOP advisor from Correct Capital, your employees won't just attain partial ownership of your company, but they'll feel like they're gaining ownership of their economic well-being and future.
Why Choose Correct Capital as Your ESOP Advisor in St. Louis, MO
Correct Capital is an independent advisory firm that specializes in helping business owners establish retirement plans and succession plans for their enterprises. There are several factors we believe set us apart from other investment advisory agencies in St. Louis, MO, and all over the United States:
- 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 range of industries, including for construction companies and contractors. As we work with both businesses and individuals and families when managing retirement plans, we're well-prepared to understand the requirements of each and develop a plan that meets the necessities of both, as well as those of your stockholders.
- Our award-winning St. Louis, MO financial advisory team is made up 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 80 years of combined experience, we pool our collective talents and insights to optimally assist each client distinctively.
- As independent fiduciary advisors, we are legally and morally bound to do what's in the optimal interest of you, your employees, and your company. We aim to form long-term relationships with our clients founded on trust and the shared goal of expanding your and your employees' financial prosperity.
Call Correct Capital to Speak With an ESOP Advisor in St. Louis, MO Today
If you're interested in learning more about ESOPs or aspire to commence the process of setting one up for your St. Louis, MO business, contact a Correct Capital ESOP advisor now. Let us do what we do best so you can concentrate on what you care about most: positioning yourself, your business, and your employees up for achievement. Get in touch with one of our St. Louis, MO ESOP advisors today at 314-930-4015 or contact us online.