Have you met ROBS?
The beauty in this is that you are able to use either of these vehicles to invest in the following;
- Existing Business (For re-capitalization)
- Purchase Franchise
- StartUp or Start a Business
- Purchase Existing Business
What makes this very beneficial is that you won't have to worry because you are able to utilize these funds Tax-Deferred and penalty free.
Most startup businesses rely on the use of lines of credit or start up loans called "micro" lending. But through ROBS these equity injections are not considered loans at all.
Let's Talk Benefits
Flexibility through diversification. By being able to take control of your retirement you can now pin point the assets or businesses that you would like to invest in. This could be your local small business coffee shop or your grandson's new start up business. You can know back your business and retirement.
You're now given the same ability that you had in investing as a employee to your company just like that of another corporation, franchise or small business.
How To Structure ROB
- C Corp - You may want to speak with one of our advisors about forming a C-Corporation. Due to the IRS mandate, rules etc. A C-Corp is the only entity that ROB will work with .
- Planning is always important no matter if it is for life, business or just your retirement. You want to make sure that you establish the type of retirement account that you want to use. Your plan should also have much to do with the business/entity that you want to use for your ROBS.
- This is not a retirement funds distribution, so no taxes or penalties are assessed against you when you use a ROBS.
- ROBS funding can be used for any business expense, including paying your employees.
- ROBS can and are often used in conjunction with other types of funding such as SBA loans, personal savings/cash injection, funding from business partner or other investor in the start up business.
- Rollover funds from a personal retirement account plan to the company 401(k) plan – The transfer of your personal retirement funds to the company retirement plan must be done using funds not through your current employer’s plan (if you are still employed by another company and have not separated from that company). Once you separate from your current employer you can use your retirements funds for a ROBS. Other types of qualified retirement funding options that can be used with a ROBS include standard/traditional IRA, KEOGHS, Thrift Savings Plan (TSP-Military), Annuities, 457, 403b, SEP and Pension Plans.
- The new Corporation 401(k) plan uses funds to purchase stock in the C Corporation – The new retirement plan can now purchase stock in the new C Corporation. Typically the number of shares that are given to the retirement plan are equal to the percentage of the funding the plan is providing for the business.
- Proceeds from the sale of the stock are used to start up a new business or franchise, purchase an existing business or recapitalize a business – The new C Corporation now has access to the funds it needs to launch and the journey of business ownership ensues.