Retirement Investments Providence RI

1. A new business entity, a C corporation is formed on the client’s behalf
2. The client then rolls up to 100% of their eligible retirement funds into a newly created 401(k) plan;
3. This plan, in turn, invests in the stock of the new corporation;
4. The corporation, now flush with funds and free of debt acquires a small business or franchise.

There are many reasons that an entrepreneur would choose to invest in their own business. Reasons may include, but are not limited to:

• They believe a small business they own and control is the best investment for their retirement plan.
• They receive a debt-free equity injection into the enterprise;
• They can provide their employees (including them) with a 401(k) plan, a benefit rarely seen in American small business today

The legal requirements for establishing and operating 401(k) plans were created under the Employee and Retirement Income Security Act (ERISA), which identifies the guidelines for 401(k) plan investments. These 401(k) plans, also called pension plans, are carefully protected by the IRS and DOL, so all transactions involving them need to ultimately benefit of the plan.

ROBS transactions are increasing in popularity, especially in a financial climate unfriendly to borrowers. Yet they’re still misunderstood by far too many...