I am helping a mutual client who is working with Guidant.
Does the operating entity that is purchased by ROBS 401k plan is required to set up a 401k plan for all its employees regardless of the size of the business or number of employees?
Yes, you’ll have to setup a 401k for your C Corporation before you can receive your retirement funds into the business. The IRS and DOL essentially allow this rollover because it’s creating jobs and benefiting employees. It’s also rolling funds over directly to another 401k account. The Account is then buying shares from the business, which is when the business receives the money. You can’t complete the ROBS transaction without a 401k, even if you’re the only employee.