One of the first items on the list of a fledgling business is to raise capital so that the business has funds to operate. When forming a new business, the owners of that business will likely invest their own funds into the business to start it up. In many cases, however, those starting a business do not have sufficient funds – either initially or for the long-term operation of the business – and thus typically look to investors for additional funding. Instead of looking outside the business for additional funding, another option to consider is using an owner’s retirement funds to invest in the business.
A business owner may use his or her retirement funds to invest in either a new or existing business, and, more importantly, may use an IRA for a business tax-free and without any penalty! However, the steps taken to accomplish this must be compliant with IRS guidance and ERISA law, and therefore it is imperative that you retain qualified tax professionals who have the expertise to develop an investment structure that is fully compliant with IRS guidance and ERISA law.
The IRA Financial Group’s tax attorneys will work with you directly to develop an IRS and ERISA fully compliant business acquisition or funding solution customized to your individual business, financial, and retirement needs. If you have retirement funds, such as an IRA or 401k and wish to invest in a business, then consider the 401k business funding structure over a Self Directed IRA, Self Directed Real Estate IRA, or a Solo 401k. With a 401k Business Funding Structure– you now can use your IRA or Solo 401k funds to:
- Use your retirement funds to invest in a new business tax-free!
- Use your retirement funds to purchase a business or franchise tax-free!
- Use your retirement funds to finance a new or existing business tax-free!
- Earn a reasonable salary from your new or existing business.
- Help grow your business.
- Recapitalize and/or expand your business.
- Maintain a qualified retirement plan and help save for the future.
- Diversify your retirement investment portfolio by investing in your own business as well as stocks and mutual funds.
- Attract and retain quality employees by offering a benefit not commonly found in small business.
- Take advantage of high contribution limits under a 401(k) Plan.
- Enjoy tax benefits generated by using a 401(k) Plan.
- Work directly with our tax and ERISA attorneys to establish an IRS and ERISA compliant structure that works best for you and your business.
Any traditional 401K plan, including a Solo 401K plan, may be used under this structure to finance a new or existing business tax-free. However, this kind of structure is not available to a Self Directed IRA, Self Directed IRA LLC or Self Directed Roth IRA.