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After working for someone else for 20 or 30 years, many people want the freedom and money making possibilities they can get only by owning their own business. But the challenge of getting the funding to start a business has kept them from trying. Now you have an option. It is called the BORSA™ Plan and it is available exclusively with the help of DRDA’s Certified Public Accountants and Business consultants. What is a BORSA™ Plan?BORSA™ stands for Business Owner’s Retirement Savings Account. It is a financial tool that allows you to fund the purchase of a franchise, business start-up, or business property using your holdings in a 401(a) pension, profit sharing 401(k), 403(b), 475, IRA rollover or Roth IRA. Done correctly a BORSA™ can be established for your business without penalty from distributions, taxes, or the use of loans.What are the requirements to set up a BORSA™ Plan?There are three basic requirements to getting a Plan set up for your business venture: 1) You have an existing retirement account such as an IRA, 2) You have created and filed a C-Corporation for your small business, and 3) you have the assistance of professionals familiar with BORSA™ rules and governing laws such as DRDA’s firm of Certified Public Accountants and Business consultants.How do you set up a C-Corporation?Corporations are independent legal entities that are separate from the people who own, control, and manage them. Although corporations are state entities, the C-Corporation status refers specifically to the tax treatment of the corporation by the federal government. In other words, the IRS views the corporation as a legal "person" that can enter into contracts, incur debts, and pay taxes apart from its owners. According to NOLO, a prospective creator of a C-Corporation must: • Choose an available business name that complies with your state's corporation rules (in Texas, for example, you can find out about corporation and business requirements through the Secretary of State’s website) • Appoint the initial directors of the corporation • File formal paperwork, usually called "articles of incorporation," and pay a filing fee • Create corporate "bylaws," that lay out the operating rules for the corporation • Hold the first meeting of the board of directors • Issue stock certificates to the initial owners (shareholders) of the corporation• Obtain licenses and permits that may be required for your business. Both the Secretary of State’s office and the NOLO websites contain forms and a wealth of additional information about setting up and running your C-corporation. Remember that having a C-Corporation is a prerequisite for establishing a BORSA™ Plan and being able to use your retirement funds to start and build your business.What if I need help?Deciding to start your own business and using money previously set aside for your retirement is scary and you absolutely want professional help to get it done correctly. To understand how you can access your retirement funds without penalties, taxes, or interest, you must understand two bodies of law: the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code of 1986 (IRC). This is where DRDA can help. DRDA is a professional corporation of certified public accountants operating nationwide out of their offices in Houston, Texas. DRDA completed the original research on establishing a BORSA™ Plan and they can help you through all of the legal and tax filing required to establish your C-corporation and create a BORSA™ Plan.
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