Requirements for Investing with a Single-Member LLC
Kingdom Trust will process investments in IRA-owned limited liability companies where the investment complies with the rules and regulations governing investments in IRAs including 26 USC 408, 26 USC 4975 and other Internal Revenue Service and Department of Labor requirements. In addition, Kingdom has additional requirements to which these investments must conform.
Governing the Establishment of the Limited Liability Company:
- The limited liability company documentation and its operating agreement must have been prepared by a facilitator whose standard form documents have been reviewed by an attorney or prepared by an attorney and have been reviewed by Kingdom Trust’s Compliance Officer.
- A file-stamped copy of the articles of organization showing the complete name of the limited liability company as it appears in the state of organization’s records must be provided prior to the funding of the investment.
- The limited liability company must apply for and obtain a Tax Identification Number from the Internal Revenue Service and provide a copy of the IRS confirmation letter to Kingdom Trust prior to funding the limited liability company.
- The operating agreement must contain language sufficient to address IRA-related issues concerning prohibited transactions (26 USC 4975), the plan asset rules, the allowance of subsequent or additional capital contributions and unrelated business income tax (including language that ensures that the manager of the LLC will prepare and file all necessary tax forms with the appropriate federal, state and local taxing authorities).
- The operating agreement must name the LLC manager and provide the manager’s address, telephone number and email address.
- The operating agreement must accurately designate the member as “The Kingdom Trust Company, Custodian, FBO [IRA Owner’s Name] IRA.”
- The operating agreement must be signed by the manager and the member (as having read, understood and agreed).
- The operating agreement must provide a signature line for an authorized signer of Kingdom Trust to sign on behalf of the member.
- A bank account in the name of the limited liability company must be established at a financial institution such as a bank, credit union or brokerage firm, and the funds invested by the IRA must be deposited into that bank account.
The account holder must complete all necessary documents required by Kingdom to process the investment, including
- The Investment Direction Kit, including the Representation Letter
- The Kingdom Trust Letter Agreement concerning IRA-owned limited liability companies.