ESOP advisor in Weldon Spring, MO. Employee stock ownership plans (ESOPs) are becoming a more and more well-liked retirement benefit for employees in a variety of sectors in Weldon Spring, MO. They offer business owners a chance to step away from their company while substantially reducing taxes on the sale, and offer employees a tax-advantaged retirement plan that increases their productivity and motivation. However, designing, implementing, and maintaining an ESOP isn't something most Weldon Spring, MO business owners can do by themselves. Correct Capital's experienced and savvy ESOP advisors help businesses of all sizes, in Weldon Spring, MO and around the country, create tailored retirement plans that benefit themselves, their employees, and their bottom line.
If you're seeking a trustworthy financial partner in Weldon Spring, 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 immediately.
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What Is an Employee Stock Ownership Plan (ESOP)?
An ESOP is a tax-advantaged retirement plan where employees receive stock of the company they work for, rather than savings accounts 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 enhanced value proposition in the hiring process, and allow business owners to set up a succession plan while preserving control. Upon reaching retirement, most employees sell the stock at marketplace value.
Perhaps even more importantly, by transferring 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 having to pay taxes promptly. In many cases, ESOPs are a succession plan that keeps the most amount of money attainable with the owner.
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
- Increase employee motivation and productivity
- Improve employee retention and loyalty
- Enable succession planning and business continuity
- Retain control while planning or easing into retirement
- Increase personal liquidity of owners, but still keep control of the company
- Carry on 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 deposit 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 get the benefits of both. The experienced Weldon Spring, MO ESOP advisors and retirement consultants of Correct Capital can assist you find the right plans for your business.
What Our Weldon Spring, 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 Weldon Spring, MO ESOP advisory firm by your side 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 alternative securities to postpone capital gains taxes on the sales, allowing you to retain more of the profit. To postpone 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 owed 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 implement an ESOP suited specifically to you and your company. We like to challenge ourselves and our clients to get imaginative with retirement plan offerings to optimize the benefits they provide. We'll evaluate your needs, assess several ESOP options, and propose a personalized ESOP that meets legal requirements and is aimed at optimizing benefits. If it makes sense, we may also advise combining an ESOP with a 401(k) or other retirement plans to further augment benefits, yet retain efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to understand their needs and work together with them to discover the optimal tax-advantaged retirement plans for their company. 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 what they need from their retirement plan
- Tax implications for both your company and shareholders
- Company culture and employee engagement to assess 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 Weldon Spring, MO can help you set up your ESOP team with trusted partners.
- Ensure compliance — IRS, Department of Labor, and ERISA all have strict guidelines for the oversight of ESOPs. For instance, when employees participating in an ESOP at a closely held employer receive company stock in an ESOP distribution, they have the right to require 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. 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 respond to them in real time, enabling your plan to stay feasible, in accordance with regulations, and beneficial.
- Employee communication and education — Our ESOP advisors offer group sessions 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 get a portion of your company, but they'll feel like they're gaining ownership of their economic well-being and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Weldon Spring, MO
Correct Capital is an independent advisory firm that specializes in assisting business owners arrange retirement plans and succession plans for their enterprises. There are multiple factors we point to that make us unique from other investment advisory agencies in Weldon Spring, MO, and across the U.S.:
- 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 aid in setting up retirement plans, we're perfectly positioned to understand the requirements of each and create a plan that fulfills the necessities of both, as well as those of your stockholders.
- 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 endeavor to forge 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 Weldon Spring, MO:
Call Correct Capital to Speak With an ESOP Advisor in Weldon Spring, MO Today
If you're interested in learning more about ESOPs or wish to start the process of setting one up for your Weldon Spring, MO business, get in touch with a Correct Capital ESOP advisor today. Let us do what we do best so you can prioritize on what you value most: setting yourself, your business, and your employees up for success. Get in touch with one of our Weldon Spring, MO ESOP advisors today at 877-930-4015 or contact us online.
