ESOP advisor in University City, MO. Employee stock ownership plans (ESOPs) have become an increasingly popular retirement benefit for employees in a variety of sectors in University City, MO. They offer business owners a chance to move on from their company while greatly 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 by themselves. Correct Capital's seasoned and savvy ESOP advisors help businesses of all sizes, in University City, MO and around the country, design 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 creating 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 immediately.
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 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 controlling shares, meaning control of the company stays with ownership and other executives. They offer excellent incentives to employees while providing businesses with a superior value proposition to employees, 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 promptly. In many cases, ESOPs are a transition plan that keeps the most amount of money possible 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 free from federal income taxes
- Align the goals of employees and stockholders
- Offer a higher value proposition when hiring
- Increase employee motivation and productivity
- Enhance employee retention and loyalty
- Facilitate succession planning and business continuity
- Maintain control while planning or easing into retirement
- Raise 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 mix between an ESOP and a 401(k). Ownership shares are given to employees as in an ESOP, employees can put in their own money to acquire additional stock 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 more diverse investments. In fact, adding an ESOP or KSOP to a more traditional retirement plan allows you to obtain the benefits of both. The experienced University City, MO ESOP advisors and retirement consultants of Correct Capital can help you find the right plans for your business.
How Our University City, MO ESOP Advisors Can Help
Whether you're motivated by a succession plan, employee incentives, or any other of ESOPs' benefits, you'll need an experienced University City, MO ESOP advisory firm in your corner to reap the most benefits of your plan. When you work with Correct Capital, we:
- Reduce 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 defer capital gains taxes on the sales, allowing you to retain more of the profit. 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 payable until the taxpayer has a disposition of the QRP. An ESOP advisor can ensure you receive the most tax benefit from your ESOP.
- Personalize your ESOP and retirement plans — Along with your team, we'll develop and set up an ESOP that works best for you and your distinctive company. We like to test ourselves and our clients to get creative with retirement plan offerings to optimize the benefits they provide. We'll evaluate your needs, assess various ESOP options, and propose a personalized ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it's a good idea, we may also advise combining an ESOP with a 401(k) or alternative retirement plans to additionally increase benefits, yet retain 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 best qualified retirement plans for their company. For clients looking at an ESOP, part of that means carrying out a feasibility analysis to establish 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 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 collaborate 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 acquire 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 guidelines for the administration 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 demand the employer to buy back them at current market price.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on how long they've worked there. Usually, that means ownership of the company is passed 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 impact on your company. ESOP advisors can plan for these changes and react to them in real time, allowing your plan to stay viable, compliant, and advantageous.
- 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 employee stock ownership plan. With an ESOP advisor from Correct Capital, your employees won't just attain 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 University City, MO
Correct Capital is an independent advisory firm that specializes in helping business owners arrange retirement plans and succession plans for their enterprises. There are numerous factors we point to that make us unique from other financial advisory firms in University City, MO, and all over the U.S.:
- 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 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 perfectly positioned to understand the requirements of each and create a plan that meets the necessities of both, as well as those of your stockholders.
- Our award-winning University City, MO financial advisory team is made up 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 optimally assist each client individually.
- 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 aim to forge long-term relationships with our clients based on trust and the shared goal of growing your and your employees' monetary well-being.
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
- Small Business Retirement Plans
- Tax Planning
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 start the process of setting one up for your University City, MO business, contact a Correct Capital ESOP advisor today. Let us do what we do best so you can concentrate on what you value most: establishing yourself, your business, and your employees up for prosperity. Get in touch with one of our University City, MO ESOP advisors now at 877-930-4015 or contact us online.
