ESOP advisor in Wentzville, MO. Employee stock ownership plans (ESOPs) are becoming a more and more common retirement plan for employees in various industries in Wentzville, MO. They offer business owners a chance to exit their company while greatly 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 Wentzville, MO business owners can do alone. Correct Capital's seasoned and savvy ESOP advisors help businesses of all sizes, in Wentzville, MO and around the nation, design tailored retirement plans that benefit themselves, their employees, and their revenue.
If you're seeking a trustworthy financial partner in Wentzville, MO who shares your goals of setting up your company and employees for prolonged success, call Correct Capital at 877-930-4015, contact us online, or schedule a consultation with one of our financial advisors immediately.
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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 tax-advantaged retirement plan where employees receive shares of the company that employs them, 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 fantastic incentives to employees while providing businesses with an improved 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 allocate the tax consequences of the sale instead of being required to pay taxes at once. In many cases, ESOPs are a transition 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)
- 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 free from federal income taxes
- Align the goals of employees and stockholders
- Offer a higher value proposition when hiring
- Increase employee motivation and productivity
- Improve employee retention and loyalty
- Simplify succession planning and business continuity
- Maintain control while arranging 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 qualified plan that is a combination of an ESOP and a 401(k). Ownership shares are given to employees as in an ESOP, employees can contribute their own money to buy 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 more 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 Wentzville, MO ESOP advisors and retirement consultants of Correct Capital can aid you find the right plans for your business.
What Our Wentzville, MO ESOP Advisors Do for You
Whether you're moving on from ownership of your company or are interested in an ESOP's other benefits, you'll need a knowledgeable Wentzville, MO ESOP advisory firm to partner with 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 have the option to reinvest the proceeds in alternative 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 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 receive the most tax benefit from your ESOP.
- Customize your ESOP and retirement plans — Along with your team, we'll design and implement an ESOP that works best for you and your unique company. We like to push ourselves and our clients to get imaginative with retirement plan offerings to optimize the advantages they offer. We'll examine your needs, evaluate different ESOP options, and suggest a personalized ESOP that meets legal requirements and is aimed at optimizing benefits. If we believe it'll work, we may also advise combining an ESOP with a 401(k) or alternative retirement plans to further increase benefits, yet retain efficiencies.
- Conduct a ESOP feasibility study — When we first meet with our clients, we work to comprehend their needs and work together with them to identify the optimal qualified 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 analyze:
- 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 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 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 accountants, attorneys, and a trustee to acquire stock of the company on behalf of the ESOP. An experienced ESOP advisor with a strong network in Wentzville, 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 management of retirement plans. For instance, when ESOP participants at a closely held employer receive company stock in an ESOP distribution, they have the right to require the employer to redeem them at market value.
- ESOP sustainability assessments — In an ESOP, shares are granted to employees over time based on seniority of service. Most of the time, that means ownership of the company is passed 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 implications for your company. ESOP advisors can plan for these changes and respond to them in real time, enabling your plan to stay workable, in accordance with regulations, and profitable.
- Employee communication and education — Our ESOP advisors offer group meetings and personalized meetings with your employees so they can maximize the benefits from your retirement 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 financial health and eventual retirement.
Why Choose Correct Capital as Your ESOP Advisor in Wentzville, 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 numerous factors we point to that make us unique from other investment advisory agencies in Wentzville, MO, and all over the U.S.:
- We know retirement plans and ESOPs. Correct Capital's clients currently operate these plans in a range of sectors, 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 demands of each and establish a plan that meets 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 utmost benefit 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 Wentzville, MO:
Call Correct Capital to Speak With an ESOP Advisor in Wentzville, MO Today
If you're interested in learning more about ESOPs or wish to start the process of setting one up for your Wentzville, MO business, contact a Correct Capital ESOP advisor now. Let us do what we do best so you can prioritize on what you care about most: establishing yourself, your business, and your employees up for success. Contact with one of our Wentzville, MO ESOP advisors today at 877-930-4015 or contact us online.
