What is the process of setting up a ROBS?
Posted 3.31.2021 in ROBS
The process of setting up a ROBS is structured and leverages the use of advisors at various stages of set-up. Advisors typically involved in this process can include funding businesses (e.g., Guidant Financial, Benetrends Financial, Tenet Financial Group, among many others) and ROBS-experienced attorneys and CPAs. Leveraging experienced ROBS advisors is important in this process to help avoid unwanted IRS complications.
Advisor-guided steps involved in setting-up a ROBS:
- Set-up a C-Corporation
- Create a 401(k) for your C-Corporation
- Rollover your personal retirement funds into your C-Corporation’s 401(k)
- Purchase stock in your new C-Corporation using the rolled-over funds
- After purchasing your own stock, the funds become available to use for your business
- Once set-up, an experienced CPA firm like Attaway Linville is highly advisable to avoid potential pitfalls and remain compliant
The length of time it takes to set-up a ROBS can vary based on your personal situation and on the level of advisor expertise. Advisors with significant ROBS experience can facilitate the set-up process within a matter of weeks. Entrepreneurs who are organized and motivated for the set-up process can help minimize the ROBS set-up time.
In this series of blogs related to ROBS, we will discuss:
- Why use a ROBS to fund your business purchase or expansion
- The pros/cons of using a ROBS
- The process of setting-up a ROBS
- Ongoing compliance requirements
- Exiting your ROBS
If you have set-up a ROBS and you are looking for expert tax/accounting/payroll support for your ROBS, please contact Attaway Linville today at 803-831-0263 or 404-607-8400 to learn more about how we can help.
This is #3 in a series of blog posts about ROBS. Click below for the other entries:
#1: Why use a ROBS to fund a business or franchise purchase?
#2: What are the Pros & Cons of using a ROBS?
#4: What are the ongoing compliance requirements of a ROBS?
#5: How can I exit my ROBS?