Congratulations! If you've been directed to this article, it's most likely because we just formed your Special Purpose LLC (SP LLC).
This SP LLC might be owned by your Solo 401k with us, or even your IRA. As we progress, we'll refer to the 401k LLC but please note the explanations and diagrams are all relevant for your IRA-owned LLC as well.
To start, please review the helpful diagram here on how the Solo 401k and Special Purpose LLC can work together. The Special Purpose LLC is an asset owned by your Solo 401k or IRA.
Funding your LLC
First you'll fund your Solo 401k or IRA via rollovers, contributions or both. Remember that all funds must first come into the IRA or 401k before they go into the SP LLC.
Once the funds are in your Solo 401k or IRA, you'll invest a portion (or all) of those funds into the LLC you manage. Like the Solo 401k, the LLC has its own tax ID number and its own bank account (separate and distinct from the Solo 401k).
To invest funds from the 401k into the LLC, complete an Investment Direction form (for your records) and then transfer funds from the 401k trust bank account to the LLC bank account.
If we've established an IRA LLC for you, our team will handle transferring the funds from the IRA into the LLC where you'll have direct checkbook control.
As you saw on the Special Purpose LLC application, we form the Special Purpose LLCs in the state of Wyoming. We do this for a few reasons:
Authority: Wyoming invented the LLC structure in 1977 and was the first state in the country to offer the Limited Liability Company
Efficiency: Initial filing and annual report can be done quickly online which means less ongoing work for you
Anonymity and Privacy: Wyoming does not require listing a member or manager on the Articles of Organization: This gives you greater privacy.
Cost effective: Low up front and ongoing fees:
A Wyoming LLC may hold assets in any state. For example, you might live in Ohio, and have a Wyoming Special Purpose LLC with an LLC bank account in Texas where the WY LLC owns rental property in Colorado. There is no additional reporting or state tax return for having a Wyoming LLC owned by your Solo 401k trust or IRA.
Access Your LLC Documents
If your Special Purpose LLC is owned by your Solo 401k, download your new LLC documents within your Solo 401k dashboard. They are contained in the .zip file titled in the name of your LLC The documents included are:
Wyoming Articles of Organization
LLC Operating Agreement
LLC EIN Letter
Wyoming Secretary of State Receipt
Sign the Operating Agreement & Minutes as they'll be needed to open the bank account.
If your Special Purpose LLC is owned by your IRA, you can find these documents on your IRA dashboard (basecamp).
Registered Agent & Annual Fees
By law, all LLCs are required to have a Registered Agent. A registered agent is an individual or business entity that accepts tax and legal documents on behalf of your business. A registered agent is also known as a resident agent or statutory agent.
Please check your email for registered agent login information for your Solo 401k-owned LLC so you can keep up to date with fees and annual filings.
Annual filing fees after the first year are $52 for the Secretary of State and $25 for the Registered Agent. Each organization will reach out to you for payment in a year's time. If you need any help with this as the year progresses, just let us know.
If we've established your IRA LLC, the registered agent fee is included in your IRA LLC annual maintenance. There are no additional filings or fees for you as our team will handle everything.
Next Step: Open Your LLC Bank Account
Your next step is to open a bank account for your new 401k LLC. You can open the LLC bank account anywhere, though we recommend you use our preferred banks to make things easier on you.
If you've opened an IRA LLC with us, we'll take care of opening the bank account for you.
Final Step: Invest 401k or IRA Funds into Your LLC
Once that's done, let us know so we can help with the final step - your official Direction of Investment form so you can document investing 401k funds into your new LLC. Congratulations again and please lean on us if we can help in any way.