Why Q4 Is the Ideal Time for CPAs to Discuss ROBS Funding with Clients Considering Business Ownership
As the year winds down, many CPAs find themselves having strategic conversations with clients about what's next. While year-end tax planning often takes center stage, Q4 is also when many professionals begin evaluating major career and financial goals—including business ownership.
Whether a client is considering a franchise, startup, or business acquisition in 2027, now is the perfect time to begin discussing funding options. One funding strategy that deserves particular attention is ROBS (Rollover as Business Startups), a powerful tool that allows qualified individuals to use retirement funds to capitalize a business without incurring early withdrawal penalties or taxes.
Why Business Ownership Conversations Start in Q4
Most future business owners don't wake up on January 1 and decide to buy a business. The process typically begins months earlier.
During the fourth quarter, clients often:
Reflect on career satisfaction and long-term goals
Review retirement savings and investment strategies
Explore alternative income opportunities
Consider entrepreneurship as part of their future financial plan
Begin researching franchises and business opportunities
As trusted advisors, CPAs are often among the first professionals these clients consult.
What Is a ROBS Plan?
A ROBS (Rollover as Business Startups) Plan is a qualified retirement plan structure that allows eligible retirement funds to be invested into a new business. The strategy utilizes a 401(k) plan established by a newly formed corporation, allowing retirement assets to be invested in the company's stock as part of the business capitalization process.
In a properly structured ROBS arrangement:
The business owner becomes an employee of the corporation.
A new qualified 401(k) plan is established.
Eligible retirement funds are rolled into the new plan.
The retirement plan invests in stock of the new corporation.
The corporation uses the proceeds to operate and grow the business.
Because the funds are invested rather than distributed, qualified individuals can access capital for business ownership without triggering taxes or early withdrawal penalties.
Important Requirements Every CPA Should Understand
ROBS funding can be an effective solution, but it must be structured correctly and maintained properly.
Some of the most important considerations include:
The Business Must Be a C-Corporation
A ROBS strategy requires the business to be organized as a C-Corporation. The company must also function as an active operating business.
Retirement Funds Are Invested Tax-Free
Eligible retirement funds can be invested into the business through the qualified plan structure, providing access to capital without a taxable distribution.
Family Members Can Be Employees
Business owners may hire family members, pay W-2 wages, and offer participation in the company's retirement plan, creating additional opportunities for long-term retirement savings.
Ongoing Compliance Is Essential
ROBS plans are not a one-time transaction. Annual filings are required for both the C-Corporation and the 401(k) Plan, and the plan must continue operating in accordance with applicable IRS requirements. A qualified plan must maintain compliance in both its design and ongoing operation.
Why Experience Matters
Many accountants, attorneys, and other advisors encounter ROBS funding only occasionally. In fact, the strategy is often unfamiliar to local professionals who do not specialize in retirement plan design or ERISA compliance.
That's why choosing an experienced funding partner is critical.
At Tenet Financial Group, our team brings more than 100 combined years of funding experience helping entrepreneurs launch businesses and franchises. Beyond establishing the initial structure, we handle plan design, installation, administration, and ongoing support throughout the life of the plan to help clients maintain compliance with IRS and ERISA requirements.
Why Q4 Is the Best Time to Start Planning
Clients considering business ownership in 2027 should not wait until January to explore funding options.
Starting the conversation now allows time to:
Evaluate retirement account eligibility
Determine whether a ROBS structure is appropriate
Establish the proper corporate entity
Coordinate with tax and legal advisors
Complete required setup steps before launching a business
By beginning the process during Q4, clients can enter the new year with a clear funding strategy and greater confidence in their business ownership plans.
A Resource for Your Clients
For clients exploring franchise ownership, business acquisitions, or startup opportunities, understanding all available funding options is essential. ROBS funding can be a powerful solution when structured and administered correctly.
If you have clients considering business ownership in 2027, Tenet Financial Group is available as a resource to help evaluate whether a ROBS strategy aligns with their goals and financial situation.
With more than 100 combined years of funding expertise and comprehensive ongoing plan administration, we're committed to helping entrepreneurs build businesses on a strong financial foundation.
