Invest My solo 401k in My Employer


I’m running my consulting business through a single member LLC. I don’t envision having any additional employees for this LLC.
My goal is to roll an IRA into a Solo 401(K) to invest in some of my consulting clients, traditional mutual funds/stocks, possibly Bitcoin and perhaps take out a loan.
There are three companies that I’m consulting for where there is a chance that one of the two may occur:
  • Be compensated with up to 5% of company stock
  • Become an employee or be appointed to the board of directors
Could I use the Solo 401K funds to invest in these companies?
Also, if I invest in a rental property, can I personally rent it at market rates and no have a prohibited transaction?


Investing in the following is not allowed if the solo 401k invests directly; however, it is allowed if you borrow from the solo 401k funds and then use those funds for what you are trying to accomplish.
  • Be compensated with up to 5% of company stock
  • Become an employee or be appointed to the board of directors
If the solo 401k owns the property, then no you cannot use the property for personal use even if you compensate the plan. To learn more about the solo 401k rules, please CLICK HERE.  For solo 401k FAQs, VISIT HERE.

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>


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