Highlights for Business CPA -Business Financing 401k (ROBS) 401k
While the 401k provider will take care of annual compliance items related to the business financing 401k (ROBS 401k), the business CPA should be aware of the following main items:
- The ROBS 401k funded business must be and remain a C-Corporation and NOT be an S corp as long as the 401k owns equity in the corporation.
- Ownership will be via (i) 401k for your benefit and (ii) you personally since you will invest at least 1% of your personal funds in the C-corporation.
- Any compensation that you receive for the work performed needs to be paid as w-2 wages
- No personal loans to company.
- No interact between the ROBS 401k funded business and other businesses that you own.
- Your only relationship should be w-2 employee and owner of the company.