Growth in number of individuals using retirement funds to start food and hospitality type businesses/franchises in 2015.
IRA Financial Group, a provider of Rollover Business Startup Solution (“ROBS”) solutions, has seen a surge in individuals looking to use retirement funds to establish new businesses in the food and hospitality industries. “In 2015 the food and hospitality industry has surpassed retail and manufacturing as the most popular category of new business being started with 401(k) plan funds”, stated Adam Bergman, a tax partner with the IRA Financial Group. “The relatively low start-up costs for establishing a food service type business is one reason for its popularity with entrepreneurs looking to use the retirement funds to fund a business,“ stated Mr. Bergman.
The rollover business start-up (“ROBS”) arrangements typically involves rolling over a prior IRA or 401(k) plan account into a newly established 401(k) plan, which a start-up C Corporation business sponsored, and then investing the rollover 401(k) Plan funds in the stock of the new C Corporation. The funds are then deposited in the C Corporation bank account and are available for use for business purposes. The ROBS solution is a tax efficient way for any entrepreneur looking to use IRA fund to buy a business or franchise without incurring any tax or penalty from a IRA distribution.
With IRA Financial Group’s ROBS structure, the limitation imposed using a Self-Directed IRA LLC to buy a business can be sidestepped because the individual retirement account business owner would not be able to be actively involved in the business, earn a salary, or even personally guarantee a business loan. Whereas, if the business owner used a ROBS IRS strategy, that individual would be able to be actively involved in the business, earn a salary, as well as personally guarantee a business loan without triggering the IRS prohibited transaction rules. “IRA Financial Group’s ROBS solution will allow entrepreneurs the ability to use IRA or 401(k) plan funds to help fund a new business or finance an existing business, “stated Mr. Bergman.
The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP.
IRA Financial Group is the market’s leading provider of self-directed IRA LLC “checkbook control” solutions. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate without custodian consent.