ESOP advisor in Swansea, IL. Employee stock ownership plans (ESOPs) have become an increasingly popular retirement plan for employees in various industries in Swansea, IL. They offer business owners an opportunity to exit their company while considerably 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 Swansea, IL business owners can do without professional help. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in Swansea, IL and around the United States, design tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're looking for an experienced financial partner in Swansea, IL who shares your goals of setting up your company and employees for sustained success, call Correct Capital at 877-930-4015, contact us online, or schedule an appointment with one of our financial advisors at this moment.
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What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a tax-advantaged 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 decision-making shares, meaning control of the company stays with the C-suite. They offer excellent 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 marketplace value.
Perhaps most importantly, by handing over part of your ownership to the ESOP, owners can defer capital gains taxes, allowing you to allocate the tax consequences of the sale instead of being required 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)
- 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
- Improve employee motivation and productivity
- Improve employee retention and loyalty
- Enable succession planning and business continuity
- Maintain control while planning or easing into retirement
- Amplify personal liquidity of owners, but still keep 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 contribute their own money to purchase additional stock 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 the risk tolerance that comes with diverse investments. In fact, adding an ESOP or KSOP to a more traditional retirement plan allows you to attain the benefits of both. The experienced Swansea, IL ESOP advisors and retirement consultants of Correct Capital can assist you find the best retirement plan for you, your business, and your employees.
What Our Swansea, IL ESOP Advisors Do for You
Whether you're stepping from control of your company or are interested in an ESOP's other benefits, you'll need an experienced Swansea, IL 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, allowing you to keep more of the sales proceeds for other purposes. 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 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 guarantee you obtain the most tax benefit from your ESOP.
- Customize 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 push ourselves and our clients to get imaginative with retirement plan offerings to optimize the benefits they offer. We'll evaluate your needs, assess various ESOP options, and recommend a tailored ESOP that meets legal requirements and is aimed at optimizing benefits. If it makes sense, we may also recommend combining an ESOP with a 401(k) or other retirement plans to additionally augment benefits, yet retain efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to comprehend their needs and work together with them to identify the optimal qualified retirement plans for their company. For clients looking at an ESOP, part of that means carrying out a feasibility analysis to determine 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 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, lawyers, and a trustee to purchase stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Swansea, IL can help you set up your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the management of employee stock ownership plans. For example, 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 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 seniority of service. Usually, 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, enabling your plan to stay viable, in accordance with regulations, and profitable.
- Employee communication and education — Our ESOP advisors offer collective workshops and individual consultations with your employees so they can get the most from your ESOP. With an ESOP advisor from Correct Capital, your employees won't just acquire a portion of your company, but they'll feel like they're achieving ownership of their economic well-being and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Swansea, IL
Correct Capital is an independent advisory firm that specializes in assisting business owners establish retirement plans and succession plans for their enterprises. There are multiple factors we believe distinguish us from other investment advisory agencies in Swansea, IL, and throughout the U.S.:
- We're experienced in 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 when managing retirement plans, we're ideally suited to understand the demands of each and develop a plan that meets the needs 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 forge long-term relationships with our clients grounded in trust and the mutual goal of growing your and your employees' financial prosperity.
Other services we offer in Swansea, IL:
Call Correct Capital to Speak With an ESOP Advisor in Swansea, IL Today
If you're interested in learning more about ESOPs or desire to start the process of setting one up for your Swansea, IL business, get in touch with a Correct Capital ESOP advisor now. Let us do what we do best so you can prioritize on what you value most: establishing yourself, your business, and your employees up for prosperity. Contact with one of our Swansea, IL ESOP advisors now at 877-930-4015 or contact us online.