Buying an Existing LLC
How it Works
Before purchasing an existing LLC, be sure the transaction does not include any of the following disqualified persons:
- A beneficiary of the IRA. This includes a trust named as beneficiary.
- A fiduciary of the IRA. This includes you, the IRA holder, and anyone else who exercises discretionary authority over the IRA. Note: This does not include Entrust, since we do not provide investment advice or have any discretionary authority/responsibility for the administration of the IRA.
- A service provider to the IRA. This includes Entrust, investment advisors, brokers and attorneys.
- A family member. This includes a spouse, ancestor, any lineal descendant, or spouse of a lineal descendant, of any individual who is a fiduciary or service provider to the IRA.
- A business which falls into one of the following categories:
- A corporation in which 50 percent or more of the stock (including the voting power or value of the stock) is owned directly or indirectly by a fiduciary, service provider, or family member.
- A partnership, in which 50 percent or more of the capital interest or the profits interest is owned directly or indirectly by a fiduciary, service provider, or family member.
- A trust or estate of which 50 percent or more of the beneficial interest is owned directly or indirectly by a fiduciary, service provider, or family member.
- An officer, director, or shareholder with 10 or more pecent, a highly compensated employee (earning 10 percent or more of the yearly wages of an employer) of a corporation, a partnership or a trust or estate, or a 10-percent-or-more (in capital or profits) partner or joint venture of a partnership, trust, or estate.
If the above conditions are met, send the following documentation to The Entrust Group for review and funding of the LLC purchase:
- Buy Direction Letter.
- Private Placement Disclaimer.
- Purchase/Subscription and/or Operating Agreement. (Be sure to have the title properly vested and the documents notated “Read and Approved” with your signature and date).
- The entity’s formation document (a document that specifies the owner and members with their percentage of ownership of the LLC, e.g., Articles of Organization).