Often Told Myths

• Congress never intended plans to be used this way.
  
  
• The new company may only pay you a salary once the business is profitable or generating cashflow.
  
  
• These plans may not be used to fund a finance business.
  
  
• An IRS advisory letter issued to the plan document sponsor is equlivant to an individualized Favorable Determination Letter issued, after full disclosure to the IRS, to you in the name of your company and plan.
  
  
• It is required, or at least advisable, to have a salary deferral [401(k)] and employer match [401(m)] as part of your plan.
  
  
• A business valuation is required by the plan as part of due dilligence of a business acquisition.