ESOP advisor in University City, MO. Employee stock ownership plans (ESOPs) have become an increasingly popular retirement plan for employees in a variety of sectors in University City, MO. They offer business owners a chance to move on from their company while significantly reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that increases their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most University City, MO business owners can do by themselves. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in University City, MO and around the United States, develop tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're looking for an experienced financial partner in University City, MO who shares your goals of establishing 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 stock of the company that employs them, rather than savings funds or investments in other companies such as in a 401(k). ESOPs are 100% company funded, and often times shares offered to employees are not voting shares, meaning control of the company stays with the C-suite. They offer excellent incentives to employees while providing businesses with an enhanced value proposition in the hiring process, and allow business owners to set up a succession plan while maintaining control. When they retire, most employees sell the stock at market value.
Of special interest to business owners, by selling 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 being required to pay taxes immediately. In many cases, ESOPs are a succession 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)
- Extra tax deductions through contributions made to employees
- If the business is one day 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
- Improve employee motivation and productivity
- Enhance employee retention and loyalty
- Enable succession planning and business continuity
- Maintain control while organizing or easing into retirement
- Raise personal liquidity of owners, but still hold on to control of the company
- Carry on 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 offered to employees as in an ESOP, employees can put in their own money to acquire additional shares 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 the risk tolerance that comes with diverse investments. In fact, incorporating an ESOP or KSOP to a more traditional retirement plan allows you to receive the benefits of both. The experienced University City, MO ESOP advisors and retirement consultants of Correct Capital can support you find the best retirement plan for you, your company, and your employees.
What Our University City, 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 University City, MO ESOP advisory firm to partner with 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, allowing you to keep more of the sales proceeds for different purposes. To defer capital gains taxes, your ESOP advisor can help you carry out 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 guarantee you get 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 one-of-a-kind company. We like to push ourselves and our clients to get imaginative with retirement plan offerings to maximize the benefits they provide. We'll evaluate your needs, evaluate different ESOP options, and recommend a personalized ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it's a good idea, we may also recommend combining an ESOP with a 401(k) or other retirement plans to further boost benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to understand their needs and collaborate with them to identify the best tax-advantaged retirement plans for their business. For clients interested in an ESOP, part of that means performing a feasibility analysis to establish if it's a workable option for your company. We'll look at:
- 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 see 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 CPAs, lawyers, and a trustee to purchase stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in University City, MO can help you arrange your ESOP team with reliable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the administration 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 option to demand the employer to buy back them at 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 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 develops and matures, so will its impact on your company. ESOP advisors can plan for these changes and respond to them in real time, facilitating your plan to stay workable, compliant, and profitable.
- Employee communication and education — Our ESOP advisors offer group meetings and individual consultations with your employees so they can maximize the benefits from your ESOP. With an ESOP advisor from Correct Capital, your employees won't just acquire partial ownership of your company, but they'll feel like they're achieving ownership of their economic well-being and future.
Why Choose Correct Capital as Your ESOP Advisor in University City, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners arrange retirement plans and succession plans for their businesses. There are numerous factors we point to that distinguish us from other financial consulting companies in University City, MO, and throughout the nation:
- We know 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 aid in setting up retirement plans, we're well-prepared to understand the requirements of each and develop a plan that satisfies the requirements of both, as well as those of your stockholders.
- 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 aim to form long-term relationships with our clients grounded in trust and the shared goal of increasing your and your employees' wealth.
Other services we offer in University City, MO:
Call Correct Capital to Speak With an ESOP Advisor in University City, MO Today
If you're interested in learning more about ESOPs or desire to commence the process of setting one up for your University City, MO business, get in touch with a Correct Capital ESOP advisor at this moment. Let us do what we do best so you can focus on what you value most: establishing yourself, your business, and your employees up for achievement. Get in touch with one of our University City, MO ESOP advisors immediately at 877-930-4015 or contact us online.
