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How do I utilize my 401K to purchase a business and avoid penalties?

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Help keep our Community clean and on topic. The BizBuySell Community is a place where you can discuss your questions, concerns and knowledge with others you can trust. It is not OK to use this forum to solicit others for personal or financial gain, or to rant about personal issues. It's all in the guidelines.

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Answers (8)
Satish Patel
Sunbelt Business Advisors
Middlesex County, MA
Premium Broker

I don't agree with what Scubes claims. I am a broker and deal with 401. We do not have a policy of pushing any business to fill our pockets. Not all brokers are the same, so you should not generalize.

Larry - You can contact me at for any advise.

Mark S.

Mar 16, 2010
Robert Cutler
New York County, NY

Marreddy, I don't understand what that has to do with the original posting. Please refer to the community guidelines listed below -- this is not a forum for posting off-topic spam.

Mar 15, 2010
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This is P M REDDY from Hyderabad,INDIA. i am planing to sale my web design company with branding.

The company was established in the year 2006 with name of TECH TRIX TECHNOLOGIES and later renamed as MOTIVE MINDS PVT LTD in the year 2007.

We have about 70 strong client list with whom our major revenue inflow constitute. The gross income for the company is on an average 210000$USD. We have developed around 300 websites

1.Our Corporate website URL

2.Total Employee Strength : 40 (Employee strength figures till January, reduced after plans for sell off)

If u r interest sale this company please get in touch with me at

We r expecting price 298000$ USD.

Sale Reason: To venture into Education & School business


Mar 15, 2010
Robert Cutler
New York County, NY

You have to be careful in structuring this so it doesn't have the appearance of self-dealing -- I would recommend that you consult with an ERISA/tax attorney before you do anything further.

Mar 15, 2010
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Hernando County, FL

Jonah Jimenez......couldnt of said it any better. That is the best way we know how to do it. Dont use the brokers.....they will eat at your money.

Mar 14, 2010
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Gwinnett County, GA

you have to make sure there is no penalty to involved thats why I used this company

Mar 10, 2010
Douglas Batts
Murphy Business & Financial Corporation
Collin County, TX
Premium Broker

Larry, there are number of accredited companies out there that specialize in doing just what you need help with. I can personally refer you if you will contact me privately.

Dec 27, 2009
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Coastline Window
Orange County, CA

The steps I did were...
1. Form a C corp
2. Form a 401k plan
3. Transfer existing 401k funds into item 2
4. Item 2 then purchases shares issued by the C corp (item 1)

Dec 22, 2009

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