QUESTION:
How does the payout work for the ROBS 401k regarding profit from the business? Would the business issue a dividend to the ROBS 401k?
ANSWER:
In short: yes. All of the revenue generated by the ROBS 401k funded business will simply flow in and out of the corporation’s business account. If at the end of the year after the company has paid expenses & taxes, the company has earned an after-tax profit the company could decide to distribute that profit to the owners. In that case, the company would pay out dividends (profit) to the stockholders in which case it must pay all stockholders dividends in accordance with the ownership percentages. For example, if you and the 401k both own stock in the ROBS funded corporation, and the corporation decided to process a dividend payment, both parties would receive dividends.
