Common questions

Nova 401(k) by Talcott Forge is a single-plan ROBS product. We handle the C-Corp formation, the 401(k) plan and trust, the rollover from your existing retirement account, the stock issuance, and the ongoing compliance that keeps the structure in good standing. One flat setup fee and one flat quarterly administration fee.

ROBS -- Rollover as Business Startup -- lets a 401(k) plan invest in the stock of the company that sponsors it. You form a C-Corporation. The C-Corp sponsors a new 401(k) plan. Your existing retirement funds (401(k), IRA, 403(b)) roll into the new plan. The plan buys C-Corp stock. Capital moves from the plan into the business. No income tax, no early-withdrawal penalty, no debt.

Yes. ROBS is an IRS-recognized structure that has been in use since the 1970s. It relies on provisions in ERISA and the Internal Revenue Code that explicitly allow a 401(k) plan to invest in qualifying employer stock. Keeping a ROBS plan compliant is a matter of documentation, annual filings, and required testing -- which is exactly what Nova administers.

Setup covers: C-Corp formation and state filings, EINs (C-Corp and plan trust), the 401(k) plan document and trust agreement, custodian account setup, rollover coordination with your current custodian, stock issuance to the plan, and cap table setup. Ongoing administration covers: annual Form 5500, required nondiscrimination testing, plan amendments, and the filings that attach to corporate events (funding rounds, acquisitions, sale).

Run the eligibility check. It takes a few minutes and tells you whether ROBS fits your situation before you commit to anything. If you qualify and want to proceed, Nova walks you through intake, forms the entity, sets up the plan, and coordinates the rollover.

Most founders need at least $50,000 in a qualifying retirement account for ROBS to make economic sense. Below that, setup and annual administration costs consume too much of the capital you would actually deploy. Above $50K, the math starts to work; above $150K, it works comfortably.

Traditional 401(k), Traditional IRA, 403(b), 457(b), SEP-IRA, SIMPLE IRA, and similar qualified pre-tax retirement accounts. Roth dollars generally don't work in a ROBS structure because the tax treatment is different. Balances in a 401(k) at your current employer usually can't be rolled out until you separate -- we can help you figure out what's available.

Three requirements: (1) qualifying retirement funds, typically $50,000 or more; (2) a business you will actively run as a bona fide W-2 employee of the new C-Corporation; (3) willingness to operate as a C-Corp. If you meet all three, a ROBS structure is available.

Yes, generally. ROBS requires you to become a bona fide W-2 employee of the new C-Corp and draw a reasonable salary. You cannot run the business as a passive side holding. Most founders use the C-Corp as their primary job once funded.

A 401(k) plan is only permitted to invest in "qualifying employer securities" under ERISA 407(d)(5). In practice, that means common or preferred stock of a C-Corporation. LLC membership interests, S-Corp stock, and partnership units don't qualify. That's the statutory reason for the C-Corp requirement.

Potentially yes, and this is one of the underrated benefits of ROBS. Qualified Small Business Stock (QSBS) under IRC 1202 can exclude up to $10M of gain from federal taxes on the eventual sale of the business, provided the 5-year holding period and other requirements are met. Because ROBS requires a C-Corp, you're already in the right entity structure from day one.

QSBS stacking lets multiple family members, trusts, and entities each claim up to $10M in excludable gains from the same company. By strategically issuing or gifting stock to a spouse, children, or trusts before the 5-year holding period is met, a family can multiply the exclusion. We can flag when stacking is worth considering, though the actual structuring usually involves your attorney.

Typically 3 to 6 weeks from intake to funded. The timeline depends on two things: state filing speed for the C-Corp, and how fast your current custodian processes the rollover. Standard processing from Fidelity, Vanguard, Schwab, and Empower usually lands in the 10 to 20 business day range.

For most Nova customers, your home state is the right answer. Delaware is the standard choice if you're planning to raise outside venture capital -- it's what sophisticated investors expect. Incorporating in a state other than where you operate adds foreign qualification filings and complexity, so only do it if there's a clear reason.

$5,000 one-time setup and $500 per quarter for ongoing administration. One plan, flat pricing. The full breakdown of what's included and what's not lives on the pricing page.

C-Corp formation with the state, EINs (for the C-Corp and the plan trust), the full 401(k) plan document and trust agreement, adoption agreement, custodian account setup, rollover coordination, and the stock issuance that moves capital from the plan into the C-Corp. Setup is a single engagement that ends when you're funded.

Pass-through fees like state filing fees, registered agent renewal after year one, and 409A valuations if you raise outside equity. Also not included: your operating stack (payroll software, bank account, tax preparation for your C-Corp or personal returns). Those are things you handle directly with the respective vendors.

Credits are a mechanism we use to bill optional ancillary services without re-papering scope for every one-off request -- things like additional document amendments, extra state filings, or pass-through work we handle on your behalf. 1 credit equals $1. You do not need to buy credits to be a Nova customer; they only come into play when something falls outside the plan.

Nova is a ROBS-focused product. Standalone incorporation is something we can quote separately if you already have a relationship with us, but it's not marketed as a product and not the center of what we do. If you want to reach us about an incorporation-only engagement, email us.

$500 per quarter, flat. That covers all standard ROBS administration: annual Form 5500, required nondiscrimination testing, plan amendments as IRS requirements change, and the filings that attach to corporate events. Pass-through fees (state filings, registered agent renewal) and truly optional work (additional filings) are billed separately or through credits.

Every 401(k) plan files a Form 5500 annually with the Department of Labor. If you add employees, we run the required nondiscrimination testing. When the IRS revises plan requirements, we amend your plan document. When corporate events happen (outside funding, acquisitions, sale), we handle the plan-side filings. Most of it runs in the background -- we surface what you need to sign or review.

Employees who meet the plan's eligibility criteria become plan participants. The plan needs to offer them the same 401(k) investment options available to you, and nondiscrimination testing gets more substantive. Nova handles the testing and advises on plan design choices that keep the structure compliant as the business grows.

The plan owns C-Corp stock, so when the business sells, the plan receives proceeds from its share of the sale. Those proceeds land back in the 401(k) plan. From there you can roll them into an IRA or another qualified plan, which generally preserves tax-deferred treatment. If the C-Corp meets QSBS requirements, some or all of the gain on the direct (non-plan) shares may be federally tax-excluded. Nova coordinates the plan-side filings through the transaction.

If the C-Corp goes to zero, the plan's investment in C-Corp stock also goes to zero -- the retirement funds are effectively lost. This is the hard truth about ROBS: you are deploying retirement capital into a business, and that capital carries business risk. The plan structure does not change that. If the business is wound down in an orderly way, Nova handles the plan termination filings.