ESOP advisor in Tower Grove, MO. Employee stock ownership plans (ESOPs) are becoming a more and more well-liked retirement benefit for employees in various industries in Tower Grove, MO. They offer business owners an opportunity to move on from their company while significantly 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 Tower Grove, MO business owners can do alone. Correct Capital's proficient and savvy ESOP advisors help businesses of all sizes, in Tower Grove, MO and around the nation, design tailored retirement plans that benefit themselves, their employees, and their profit.
If you're in search of an experienced financial partner in Tower Grove, MO who shares your goals of creating 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 right away.
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Correct Capital Wealth Management's office is physically located in St. Louis, MO, but we serve clients throughout the United States in both personal financial planning and corporate retirement plans.
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What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a qualified retirement plan where employees receive shares 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 governing shares, meaning control of the company stays with the C-suite. They offer superb incentives to employees while providing businesses with an improved value proposition to employees, and allow business owners to set up a succession plan while preserving control. Upon reaching retirement, 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 the tax consequences of the sale instead of needing to pay taxes promptly. 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)
- Additional 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
- Present a higher value proposition when hiring
- Boost employee motivation and productivity
- Improve employee retention and loyalty
- Enable succession planning and business continuity
- Retain control while organizing or easing into retirement
- Raise personal liquidity of owners, but still hold on to control of the company
- Preserve your business' legacy and culture
What About KSOPs?
A KSOP is a similar type of plan that is a mix between an ESOP and a 401(k). Ownership shares are provided to employees as in an ESOP, employees can add their own money to buy additional stock through payroll deductions, or the company can match employee contributions with stock instead of 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 receive the benefits of both. The experienced Tower Grove, MO ESOP advisors and retirement consultants of Correct Capital can aid you find the right plans for your business.
How Our Tower Grove, MO ESOP Advisors Can Help
Whether you're motivated by a succession plan, employee incentives, or any other of ESOPs' benefits, you'll need a knowledgeable Tower Grove, 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 other securities to defer 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 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 owed until the taxpayer has a sale 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 create and implement an ESOP suited specifically to you and your company. We like to test ourselves and our clients to get imaginative with retirement plan offerings to maximize the advantages they provide. We'll examine your needs, evaluate several ESOP options, and recommend a tailored 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 additionally augment 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 company. For clients looking at an ESOP, part of that means performing 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 how they're best served
- 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 buy stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Tower Grove, MO can help you set up your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict requirements for the management of retirement plans. For example, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the option to demand 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 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 evolves 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 viable, 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 optimize the advantages 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 Tower Grove, MO
Correct Capital is an independent advisory firm that specializes in helping business owners establish retirement plans and succession plans for their companies. There are numerous factors we believe distinguish us from other financial advisory firms in Tower Grove, MO, and throughout the nation:
- We know 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 aid in setting up retirement plans, we're ideally suited to understand the requirements of each and develop a plan that fulfills the requirements 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 shared goal of growing your and your employees' financial prosperity.
Other services we offer in Tower Grove, MO:
Call Correct Capital to Speak With an ESOP Advisor in Tower Grove, MO Today
If you're interested in learning more about ESOPs or aspire to start the process of setting one up for your Tower Grove, MO business, contact a Correct Capital ESOP advisor today. Let us do what we do best so you can prioritize on what you value most: positioning yourself, your business, and your employees up for prosperity. Reach out with one of our Tower Grove, MO ESOP advisors now at 877-930-4015 or contact us online.
