Small Business financing options?

Can anyone shed light on the best option between Audeo (Guidant) or Pension Transfer Trust that use 401k funds to form a corporation and avoid a taxable event?

I don't know which is better...sorry. I do know that you can't use qualified plan assets to purchase stock in a new business as the stock has a FMV of zero...thus making it a prohibited transaction. However, you can ISSUE shares to the plan and thus conduct transactions inside the plan. That was derived from swanson v. commissioner.

Also have to be careful if companies involved have common ownership...prohibited!

And, have to watch if more than 25% of shares of an LLC are owned by the plan. If that's the case then I believe that 100% of LLC's assets are considered plan assets. Which again may constitute a prohibited transaction but at the very least makes the LLC fiduciareis of the plan.

IMHO this is very very very aggressive use of the code and rules. And typically that comes back to haunt those that are involved. And, if not all of the 401k participants are involved in the new corporation then you have serious personal liablity if the new corporation fails. Prudent man would not invest retirement assets in new venture...

don't know if that applies to what you're trying to do or not.

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　　Debt Financing 　　Capital Investment 　　Business Investment 　　Business financing 　　Business Invest 　　Business Debt 　　Bond Investment 　　Angel Funds

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