ESOP advisor in Warson Woods, MO. Employee stock ownership plans (ESOPs) are becoming a more and more popular retirement benefit for employees in a variety of sectors in Warson Woods, MO. They offer business owners a chance to transition from their company while substantially reducing taxes on the sale, and offer employees a qualified retirement plan that builds their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Warson Woods, MO business owners can do alone. Correct Capital's seasoned and savvy ESOP advisors help businesses of all sizes, in Warson Woods, MO and around the country, design tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're looking for an experienced financial partner in Warson Woods, MO who shares your goals of creating your company and employees for enduring success, call Correct Capital at 877-930-4015, contact us online, or schedule a consultation with one of our financial advisors at this moment.
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 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 great incentives to employees while providing businesses with a better value proposition to employees, and allow business owners to set up a succession plan while retaining 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 spread out 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
- Provide a higher value proposition when hiring
- Boost employee motivation and productivity
- Boost employee retention and loyalty
- Ease succession planning and business continuity
- Keep control while arranging or easing into retirement
- Increase 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 contribute their own money to buy 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 Warson Woods, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the best retirement plan for you, your business, and your employees.
How Our Warson Woods, MO ESOP Advisors Can Help
Whether you're stepping from ownership of your company or are interested in an ESOP's other benefits, you'll need a knowledgeable Warson Woods, MO 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 transfer 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, permitting you to keep more of the sales proceeds for different 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 payable until the taxpayer has a disposition of the QRP. An ESOP advisor can assure you get the most tax benefit from your ESOP.
- Customize 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 challenge ourselves and our clients to get creative with retirement plan offerings to optimize the benefits they provide. We'll evaluate your needs, evaluate different 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 different retirement plans to additionally increase benefits, without sacrificing efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to grasp their needs and work together with them to find the optimal qualified retirement plans for their business. For clients interested in an ESOP, part of that means conducting a feasibility analysis to ascertain if it's a workable option for your company. We'll look at:
- Cash flow, debts, and overall financial health
- Ownership structure to understand the implications of 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 work 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 acquire stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Warson Woods, MO can help you arrange your ESOP team with dependable partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict regulations for the management 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 repurchase them at current market price.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on duration of service. Most of the time, that means ownership of the company is sold to the ESOP in increments. 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 adapt to them in real time, enabling your plan to stay workable, in accordance with regulations, and advantageous.
- Employee communication and education — Our ESOP advisors offer group sessions and personalized meetings with your employees so they can maximize the benefits from your employee stock ownership plan. 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 achieving ownership of their financial health and future.
Why Choose Correct Capital as Your ESOP Advisor in Warson Woods, MO
Correct Capital is an independent advisory firm that specializes in helping business owners establish retirement plans and succession plans for their businesses. There are multiple factors we believe make us unique from other financial consulting companies in Warson Woods, MO, and across 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 variety of industries, including for construction companies and contractors. As we work with both businesses and individuals and families when managing retirement plans, we're well-prepared to understand the requirements of each and develop a plan that satisfies the necessities of both, as well as those of your stockholders.
- Our award-winning Warson Woods, MO financial advisory team is composed of a diverse 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 eight decades of combined experience, we pool our collective talents and insights to best serve each client uniquely.
- As independent fiduciary advisors, we are lawfully and ethically bound to do what's in the best interest of you, your employees, and your company. We strive to form long-term relationships with our clients founded on trust and the shared goal of expanding your and your employees' monetary well-being.
Other services we offer in Warson Woods, MO:
Call Correct Capital to Speak With an ESOP Advisor in Warson Woods, MO Today
If you're interested in learning more about ESOPs or aspire to initiate the process of setting one up for your Warson Woods, MO business, reach out to 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 prosperity. Get in touch with one of our Warson Woods, MO ESOP advisors now at 877-930-4015 or contact us online.
