ESOP advisor in University City, MO. Employee stock ownership plans (ESOPs) have become an increasingly well-liked retirement plan for employees in a variety of sectors in University City, MO. They offer business owners an opportunity to pass the torch from their company while considerably reducing taxes on the sale, and offer employees a qualified retirement plan that builds their investment in your company. However, designing, implementing, and maintaining an ESOP isn't something most University City, MO business owners can do alone. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in University City, MO and around the U.S., establish tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're seeking a trustworthy financial partner in University City, MO who shares your goals of establishing your company and employees for long-term success, call Correct Capital at 877-930-4015, contact us online, or schedule an appointment with one of our financial advisors right away.
What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a tax-advantaged retirement plan where employees receive stock of the company that employs them, rather than savings 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 decision-making shares, meaning control of the company stays with the C-suite. They offer excellent 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 maintaining control. When they retire, 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 spread out the tax consequences of the sale instead of needing to pay taxes at once. In many cases, ESOPs are a transition 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
- Provide a higher value proposition when hiring
- Boost employee motivation and productivity
- Enhance employee retention and loyalty
- Enable succession planning and business continuity
- Keep control while planning or easing into retirement
- Raise 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 given to employees as in an ESOP, employees can deposit their own money to purchase additional shares through payroll deductions, or the company can match employee contributions with shares 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, introducing 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 help 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 stepping from control of your company or are interested in an ESOP's other benefits, you'll need an experienced University City, 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 can reinvest the proceeds in other 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 execute 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 owed 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 design and set up an ESOP suited specifically to you and your company. We like to challenge ourselves and our clients to get creative with retirement plan offerings to enhance the benefits they offer. We'll assess your needs, analyze different ESOP options, and recommend a tailored ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it'll work, we may also suggest combining an ESOP with a 401(k) or other retirement plans to further 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 find the optimal qualified retirement plans for their business. For clients interested in an ESOP, part of that means carrying out a feasibility analysis to determine if it's a viable option for your company. We'll examine:
- 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 CPAs, attorneys, 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 oversight of retirement plans. 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 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 sold to the ESOP in stages. 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 progresses and matures, so will its implications for your company. ESOP advisors can plan for these changes and react to them in real time, enabling your plan to stay viable, in accordance with regulations, and beneficial.
- Employee communication and education — Our ESOP advisors offer collective workshops and individual consultations 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 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 helping business owners arrange retirement plans and succession plans for their businesses. There are multiple factors we believe set us apart from other financial consulting companies in University City, MO, and throughout the country:
- 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 wide 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 create a plan that meets the needs of both, as well as those of your stockholders.
- Our award-winning University City, MO financial advisory team is composed of a wide 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 best serve each client individually.
- 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 strive to establish 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 University City, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- Self-Employed Retirement Plans
- 401(k) For Small Business
Call Correct Capital to Speak With an ESOP Advisor in University City, MO Today
If you're interested in learning more about ESOPs or aspire to commence the process of setting one up for your University City, MO business, reach out to a Correct Capital ESOP advisor now. Let us do what we do best so you can focus on what you value most: positioning yourself, your business, and your employees up for prosperity. Get in touch with one of our University City, MO ESOP advisors immediately at 877-930-4015 or contact us online.
