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In this chapter, you’ll learn how a Rollovers for Business Start-ups (ROBS) provider sets up your structure. This guide covers Guidant’s process – other companies may operate differently.

Become Qualified with a Coordinator

Your first interaction with a Guidant team member comes after you’ve indicated you’d like to be contacted, usually through a referral or online form. For this example, let’s use Scott, a five-year veteran of Guidant. Scott’s job is to learn about your situation and if you qualify for ROBS or another form of business financing. He’ll ask you basic questions like what type of business you’re interested in, the amount of eligible retirement funds you have, your age, and whether you have a business partner or spouse you’ll be working with. These questions are all to help us determine what the best next step is for you.

Once Scott has determined you likely qualify for ROBS, he’ll schedule a call with one of our expert financial consultants for you.

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Go In-Depth with a Financial Consultant

A member of our financial consultant team will call you at a pre-arranged time. Let’s say you have a call with Keith, a twelve-year Guidant veteran, and our very first employee. Keith and the rest of the team are ROBS experts – they know the ins, outs, and everything in-between for this complex product. Before your call, Keith will have read the detailed notes Scott took, so he’s familiar with your situation. Keith will ask a few clarifying questions before walking you through how ROBS works. You get to decide how high-level or detailed this conversation is – we’re here to help you. If you decide ROBS isn’t right for you – no worries! Keith can also cover the other financing options Guidant offers, like business loans.

This conversation is also your opportunity to ask anything you want to know. How does your specific situation work with ROBS? What about the spouse/family member/child you’re going into business with? How does ROBS work with your industry? Every question you have, he’ll answer.

Keith will also explain how pricing works, including the one-time ROBS setup cost and the monthly fee for compliance upkeep, continuous audit protection, and support for your new 401(k) plan. In the next chapter, we’ll discuss the annual requirements of ROBS and the value of an experienced plan administration team.

When you’re confident that ROBS is how you want to finance your business, Keith will send a contract. The contract that outlines what each party is responsible for throughout the rollover process. Now’s when you’ll enter your payment information for your rollover fee. You’ll then sign and return the secured electronic document to Keith.

Legal Team Review

Next, Keith will send your contract directly to Maria, a member of our experienced legal team. Maria will go page-by-page through your contract and the notes from Scott and Keith to ensure your transaction meets each of the compliance requirements we discussed in Chapter 1. This is a level of due diligence that we use to maintain the highest quality in our ROBS transactions.

Finance Team Set-Up and Payment

Once Maria has completed her compliance review, she’ll send your contract to a member of our finance team, Alejandro. He’ll use the information in your contract to set up your account. Alejandro will then add your payment information and charge your one-time setup fee. You’ll immediately receive an email receipt letting you know the amount we’ve charged and the payment information used. Don’t worry – we never charge your credit card without your explicit authorization.

Setting Up Your Corporation with the Fulfillment Team

While Alejandro sets up on your account, Mary or one of her fulfillment team colleagues will walk you through the process of setting up your corporation. This can be a complex process with a lot of variables, but Mary and her team are experts.

The first step to setting up your corporation is to log into our Client Portal, where you’ll provide the information Mary needs to get started. You’ll then be assigned to an Outside Legal Counsel. Yes – your account has already been reviewed by Guidant’s legal team. Why another legal review? Because we pay for you to meet a non-Guidant attorney to represent you and your company’s best interests. This is an extra layer of security to ensure your ROBS funding is completed in compliance with IRS regulations.

Simultaneously, we’ll move forward with the incorporation process. Mary will create the Articles of Incorporation and Resident Agent Consent forms, if required by your state. After you sign these forms in the Client Portal, Mary will then create the two tax ID application forms your corporation and 401(k) plans will need. You’ll sign and submit these in the Client Portal as well.

After this step, Mary will go over your plan options with you and organize your selections. She’ll then prepare your 401(k) Plan Adoption Agreement and Plan Administration Agreement. The 401(k) Plan Adoption Agreement (PAA) finalizes the setup of your 401(k) plan. The Plan Administration Agreement is the contract that outlines the services we provide that keep your 401(k) plan in compliance with the IRS. In other words, the agreement that makes you a Guidant 401(k) Plan Administration client. (We’ll cover what exactly “plan administration” entails in the next chapter.) The PAA also has a section to enter payment information for your monthly fee. You’ll be automatically enrolled in auto-pay, but you can elect to submit monthly one-time payments or mail a check, instead. If you have any questions, Mary will be happy to take you through each section of the contract.

Now that your corporation is established, Mary will send you the appropriate documents and instructions for opening your new 401(k) plan and corporate bank accounts. She’ll refer you to banks that are experts in opening these accounts in the appropriate way. You’ll then reach out to your original retirement plan custodian and request the movement of your funds to your new 401(k) account. We have you handle this step because it’s more secure for you that no outside company, including Guidant, has access to your retirement funds at any time during the rollover process.

When Mary receives the signed agreements, she’ll email you your finalized corporate and 401(k) plan documents. At this point, you’ll complete the transfer from your 401(k) plan’s bank account into your corporate bank account to purchase stock in your new company. You’ll also complete the Corporate Resolutions and Stock Transfer Ledger in the Client Portal. These sections document the transactions.

You’ll then send us completed copies of the Stock Transfer Ledger, 401(k) plan bank account statements showing the rollover transaction, and corporate bank account statements showing the stock purchase deposit. Now your funds are rolled over, and your business is funded!

Finally, our Client Success team will transfer you from Mary and the “fulfillment” process to our 401(k) Plan Administration team. This team works to keep your 401(k) plan in compliance with the IRS and DOL through the life of your business.

Next chapter, we’ll cover why IRS and DOL compliance and 401(k) Plan Administration is so important