Use Your 401k Money to Finance Your Small Business (Houston, TX)

Now you can use your 401k retirement plan funds for the funding of small business purchases, without penalties or tax. The program has been offered through DRDA CPA's of Houston, TX, since 2005 and is called a BORSA plan.

How the BORSA™ Plan Works

To understand how you can access these funds without penalties, taxes or interest you must understand two bodies or law. The two bodies of law that govern this structure are:

• Employee Retirement Income Security Act of 1974 (ERISA)
• Internal Revenue Code of 1986 (IRC)

For purposes of the structure ERISA governs who is eligible and what you can or can not do in a qualified retirement plan and the IRC addresses what is deductible going into the plan and how money is taxed when it is taken out of the plan.

Distributions from qualified retirement plans are generally taxed as ordinary income for both federal and state purposes. Additionally, distributions from a qualified plan prior to age 59 ½ are subject to a penalty of an additional 10%.

The combination of state and federal tax and penalties can require more than 50% of your retirement savings be sent to tax authorities rather than fund your retirement years.

What this means is that you can now use your own retirement account money to fund your small business without tax or penalty.

How Much Does the BORSA™ Plan Cost?

The fees establishing your new corporation include the services of filing articles of incorporation with your state, obtaining the Employer Identification Number (EIN) from the IRS, preparing corporate bylaws, organizational minutes, resolutions to open a bank account and obtain a loan, a corporate records books which contains your corporate seal, stock certificates, stock ledger, as well as provide assistance in establishing your corporate checking account.

After your money has rolled into your BORSA™ 401k account, we will also help you by determining the price per share and assist with the stock transaction that will fund your new corporation.

The incorporation fee is $1,100 and includes a corporate records book complete with seal and stock certificates.

The BORSA™ plan fees include preparing the resolution to adopt the plan, the adoption agreement which will be customized to your particular needs, a copy of the prototype, a copy of the prototype favorable determination letter, a summary plan description for your plan as well as prepare the documents required by the IRS which we will use to file for your favorable determination letter, plan enrollment forms, and beneficiary designation forms.

We will also obtain the Employers Identification Number for the plan itself. We will assist you in establishing your 401k plan  account – either at your bank or with institutions that have already established such accounts. We can also help you in the process of initiating the rollover by assisting with the filling out of distribution request forms, etc.

Plan Fees BORSA™ Setup

• BORSA™ Plan $4,000
• Per Participant Beyond Five Accounts 
• IRS Fee for Favorable Determination Letter $300

The annual fees are for the yearly preparation of Form 5500 Annual Return/Report of Employee Benefit Plan to be filed with the IRS, preparation of the Summary Annual Report, preparation of participant statements, as well as review for compliance.

Contact Us For More Detail About The BORSA PLAN

BORSA™ Houston Office:

2525 Bay Area Blvd., Ste. 460
Houston, TX 77058

Phone: (281)-954-6040