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: 
  1. 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.
  2. 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. 
  3. 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:

  1. Buy Direction Letter.
  2. Private Placement Disclaimer.
  3. 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).
  4. 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).