FRANCHISE FUNDING QUESTIONS
A. The governing body of law that allows a 401k Plan to purchase stock in the plan sponsor was passed in 1974. Although retirement plans like this are prevalent with big corporations, they’re use in small corporations is relatively new. For that reason, your CPA or Attorney may not be aware of it.
Q. How much does it cost?
A. Whether you go direct with Tenet Financial Group or allow Fund My Franchise to serve you, the fee is the same. We charge $4,995 to design and install the 401k Profit Sharing Plan. The Tenet Financial Group annual Administration Fee is billed monthly at $120, starting the month after the effective date of the plan.
Q. How long does this process take?
A. The average length of time to fund the corporation is 3 to 4 weeks.
Q. Can I take a paycheck?
A. Yes, you can pay yourself a salary as soon as you capitalize your business (typically 4 to 5 weeks). We suggest that you consult with your tax advisor regarding salary and payroll.
Q. Why a C-Corporation?
A. A retirement plan is allowed to purchase stock of the plan sponsor, so long as the plan sponsor is a “separate taxpaying entity.” The only corporate entity that is considered a “separate taxpaying entity” is a C-Corporation.
Q. Has Tenet Financial Group completed many of these plans?
A. Tenet Financial Group has designed, installed and currently administers hundreds of retirement plans.
Q. What kind of support does Tenet Financial Group provide if audited?
A. The IRS has a formal review process that they implemented after issuing their operational guidelines in October, 2008. As your Third Party Administrator, Tenet Financial Group will maintain all of your 401k Plan records. If you were to receive an IRS Inquiry letter, Tenet Financial Group would assist you in accurately answering all of the questions. Since the IRS implemented their review process, Tenet Financial Group has never had a plan inquiry escalate into a full plan audit. However, if your plan was audited, Tenet Financial Group would assist you until the audit is completed.
Q. Why should I consult with my CPA prior to starting the process with Fund My Franchise?
A. Your tax advisor is an integral part to this process. To insure that your opening balance sheet is correct and the ongoing administrative responsibilities are met, we recommend that you meet with your tax advisor.
Q. What makes Fund My Franchise and Tenet Financial Group different?
A. We are not a sales company. Our mission at Fund My Franchise is to help you explore your funding options so you become comfortable when making a decision. We know your goal is to be a business owner and in order for you to feel comfortable in making your final decision, you have to feel comfortable with your funding option(s). We provide a very high level of customer service to ensure that the design, installation and administration of your new 401k plan is done correctly. For most of our clients, this process is largely unfamiliar. Because of that, we view our professional responsibility to our clients as one of our highest priorities.