How to Compare ROBS Companies Without Relying on Rankings

A ROBS company helps a founder implement a structure in which eligible retirement assets move into a qualified retirement plan sponsored by a C corporation, and that plan buys stock in the corporation. IRS materials describe the arrangement and identify recurring examination concerns: promoter fees, valuation, plan qualification, Form 5500 and Form 1120 filing issues, discrimination and employee-access failures.^[1][2][5][9] The comparison should therefore start with duties, not slogans. Ask what work the company performs at setup, what work it performs every year, what it excludes, and what evidence you will have if the IRS, DOL, a lender, a buyer, an employee or a later professional asks how the transaction was handled.

This page gives you a method you can apply to any proposal and complements the provider-by-provider fit analysis on the best ROBS providers page. High-touch service fits when the added scope answers documented needs. Lower-cost service fits when the quote includes the required annual administration, valuation, employee eligibility, filings, audit support and exit work. A quote-only company becomes comparable after it gives you written prices and written exclusions.

Use the provider matcher only after you have built the worksheet. The provider matcher can help organize fit, but it cannot replace reading contracts, checking conflicts, confirming excluded costs and preserving source documents.

Build the evidence ledger before you talk yourself into a winner. Put each source, date checked, claim, contract clause and unresolved item in one place. Use government sources for legal and compliance claims. Use provider pages and proposals only for what that provider says it sells, charges or excludes. IRS and DOL sources are appropriate for ROBS mechanics, rollover rules, fiduciary duties, Form 5500 obligations, C corporation filing context and employer-stock valuation principles.^{[1][2][3][4][5][9][10][11]} Provider pages are appropriate evidence for public pricing or public service descriptions, but they do not prove quality, independence, legal safety or superiority.

Use a simple ledger format: source number, source type, exact claim, location, date checked, confidence and update trigger. A pricing page might have high confidence for the dollar amount shown today but low confidence for what your transaction will cost if employee census work or a later exit is outside scope. A provider phone call has low confidence until confirmed by proposal or contract. A sample agreement has high confidence only if the signed agreement uses the same language.

Commercial disclosures belong in the same ledger. FTC guidance says material connections, including affiliate relationships, should be clear, conspicuous and close to the relevant recommendation, and FTC review guidance warns against deceptive review or independence claims.^[12][13] For your comparison, note whether the site you are reading earns referral fees, whether a provider pays for placement, whether the methodology says compensation affects order, and whether the disclosure appears near the recommendation rather than hidden in a footer. The disclosure does not make the facts false. It tells you what extra independence checks to perform.

These terms assign responsibility for setup, plan operation, assets and decisions before you compare contract language.

Step 1: write your transaction facts. List the rollover account types, whether the money is distributable, the amount expected to roll over, whether the business is a startup, franchise or acquisition, expected employees in the first three years, financing stack, opening timeline and exit assumptions. IRS rollover guidance is relevant because not every retirement balance is currently eligible for rollover, and direct rollover mechanics differ from indirect rollovers and withholding-sensitive transactions.^[3]

Step 2: request the same packet from each company: setup agreement, ongoing administration agreement, fee schedule, sample annual workflow, audit-support terms, valuation description, employee eligibility workflow, filing responsibilities, cancellation terms, refund terms, data-security terms and referral-compensation disclosures. If a company will not provide a written scope before payment, mark every unprovided item as quote-only or unverified rather than filling the gap with sales-call language.

Step 3: separate setup from operation. Setup is the transaction. Operation is the retirement plan that remains after the rollover. IRS and DOL sources both make the continuing nature of the duties clear by discussing annual filings, plan operations, employee coverage, valuation, fiduciary duties and provider monitoring.^[1][4][5] A provider that looks thorough during formation but thin after funding may leave you searching for help when employees become eligible or when a buyer asks for plan records.

Step 4: normalize money. Put each company through the formulas in the next section. Do not compare a $4,500 setup fee with a $5,500 setup fee if one includes first-year administration, valuation and registered agent service while the other excludes them. Do not compare monthly administration to annual administration until you convert both to the same period.

Step 5: inspect responsibility language. Circle every sentence that says the company does not provide legal, tax, investment or fiduciary advice. That language may be appropriate, but it tells you where you need an attorney, CPA, benefits professional, valuation specialist or lender to review the plan. EBSA guidance expects fiduciaries to understand and monitor service providers, not merely hire them and stop.^[4]

Step 6: document red-flag boundaries. Do not declare fraud from thin facts. Instead, record boundary failures: no written fee schedule, no annual administration scope, no employee eligibility process, no valuation explanation, pressure to sign before contract review, guarantee of IRS approval, refusal to identify excluded costs, unclear audit support, or disclosure language that conflicts with paid placement. Those boundaries justify more diligence or walking away without making accusations you cannot prove.

Use these formulas exactly. Put unknowns in the worksheet as quote-only; do not estimate them. Put waived first-year items in the included column only if the contract says they are included and states the renewal date.

These formulas are not an attempt to predict total business cost. They intentionally omit operating expenses, payroll, CPA tax return preparation unless bundled, legal review unless bundled, lender underwriting costs unless required in the same proposal, franchise fees, brokerage investment expenses, IRS or DOL penalties, plan correction costs and exit costs unless the provider contract prices them. The point is reproducibility: another reader using the same written quote should reach the same first-year and three-year figures.

Use accessible cards instead of a wide table. For each card, mark included, excluded, extra fee, quote-only or unclear. Then paste the contract clause or proposal sentence next to the mark.

Start with audit support. Ask: who answers an IRS or DOL inquiry, is an attorney included, which agency is covered, what documents are prepared before any inquiry, what years are covered, what happens if the issue involves employee eligibility or valuation, and does support continue after cancellation? IRS materials show why these questions matter by listing operational and filing failures found in ROBS work.^[1][2]

Ask valuation questions next. What method is used at formation? Who determines annual fair market value? Is the valuation provider independent from the setup fee? What business records must you deliver? What events require a new valuation? Does the provider handle a buyer, lender or plan redemption question, or only annual reporting? EBSA sources put the good-faith fair-market-value determination on the trustee or named fiduciary for non-public employer securities, so the file should show process, not just a number.^[10][11]

Ask employee questions before employees exist. What eligibility provisions are in the plan document? Who tracks hours? Who sends notices? Who explains enrollment? Who tests the plan? What happens when part-time workers become eligible? What if the founder wants to exclude employees? How are participant statements handled? A ROBS-funded company with employees is maintaining a retirement plan, and EBSA fiduciary guidance applies to plan operation and service-provider monitoring.^[4]

Ask filing questions in writing. Which forms does the company prepare, which does it review, which does it only remind you about, and which are always outside scope? Include Form 5500 or Form 5500-EZ, 1099-R, Form 945 and Form 1120 in the question list because different providers handle different parts of that stack.^{[5][6][7][8][9]}

Ask exit questions before setup. If the business fails, who values worthless or impaired stock? If the business is sold, who coordinates redemption or plan termination? If a strategic buyer wants assets, who handles the plan-held stock? If you add an investor, who updates the capitalization records and evaluates dilution? If you convert out of C corporation status, who tells you what has to happen to plan-held employer securities? Do not accept “call us later” as the only answer. Later is when leverage is lowest.

Credentials are useful only when connected to assigned work. Ask whether the people touching your file include ERISA counsel, a CPA, a QKA or other plan credential, a valuation credential, an enrolled agent, a loan packager or a general sales representative. Then ask whether those people are employees, contractors or referral partners, and whether their advice is included or separately billed. A credential mentioned on a website does not tell you who will review your plan.

Conflicts are not limited to affiliate commissions. A provider may earn from setup, administration, payroll, bookkeeping, tax preparation, valuation, lending, insurance, registered-agent service, brokerage relationships or referral partners. None of those revenue lines automatically disqualifies a company. They become comparison inputs when they affect recommendations, pricing, independence, valuation selection or the order in which companies appear on a review site. FTC materials are especially relevant when a publication recommends companies and receives compensation or when a company-controlled review site implies independence.^[12][13]

Use boundary language rather than accusations. Write “compensation relationship disclosed but ranking effect unclear,” “provider controls review page,” “valuation provider not identified,” “attorney access advertised but contract says legal advice excluded,” or “audit support advertised but agency scope not defined.” Those notes are specific, reproducible and fair.

Use each scenario to identify the duty file and worksheet fields that matter for a different transaction. The dollar amounts describe transaction facts; provider costs remain separate worksheet inputs and are not calculated in these cards.

Control 1: compare only written scope; sales calls can clarify but should not decide. Control 2: preserve unknown amounts as quote-only rather than guessing. Control 3: use government authority for compliance duties and provider marketing only for provider promises. IRS and DOL sources define the duty environment; provider sources describe provider promises.^[1][4] Control 4: contract beats webpage. If the page says audit protection and the contract excludes agency response, use the contract for your decision and keep the screenshot as a discrepancy. Control 5: cheap is allowed, unsupported is not. Control 6: expensive is allowed, vague is not.

Control 7: update the file when facts change. Update triggers include new public pricing, changed provider ownership, changed administration agreement, new employees, missed filings, amended plan documents, new financing, owner compensation changes, business sale, business failure, IRS or DOL guidance changes, FTC disclosure changes or a provider removing a public claim. Source uncertainty is part of the decision record, not a defect to hide.

Complete this final review from written evidence before turning the comparison into a short list.

These short answers cover the contract, pricing, fiduciary, audit-support and disclosure questions readers most often need before comparing proposals.

Evidence ledger summary: 13 numbered sources are used in the article. Official IRS sources support ROBS mechanics, rollover rules and filing context. Official DOL/EBSA sources support fiduciary duties, Form 5500 context and employer-stock adequate-consideration concepts. Official FTC sources support commercial disclosure and review-independence claims. Provider pages may be added to your private worksheet as examples of quoted price and scope, but this article does not use them to prove provider quality or superiority.

Unverified claims intentionally not made: no company is called the best, safest, most compliant, most experienced, most affordable or most likely to pass an audit. No provider is called fraudulent. No audit-support promise is treated as audit immunity. No valuation support is described as removing fiduciary responsibility. No quote-only provider is assigned an invented price. No public review, testimonial or affiliate relationship is used as proof of service quality.

Update triggers: IRS ROBS page revision, IRS rollover guidance revision, IRS or DOL form-instruction changes, EBSA fiduciary or adequate-consideration guidance changes, FTC endorsement or review-rule guidance changes, provider fee changes, provider service-scope changes, new employee eligibility facts, missed filings, business sale, stock redemption, plan termination or changed commercial relationships.

1. [1] IRS: Rollovers as Business Start-Ups Compliance Project

   IRS overview of ROBS mechanics and recurring compliance problems, including promoter fees, valuation, Form 5500, Form 1120, employee access, discrimination, and operational failures.

2. [2] IRS: Guidelines Regarding Rollovers as Business Start-Ups

   IRS Employee Plans memorandum describing the typical ROBS transaction, C corporation plan sponsor, employer-stock purchase, valuation and examination issues.

3. [3] IRS: Rollovers of Retirement Plan and IRA Distributions

   IRS participant guidance on direct rollovers, indirect rollovers, eligible rollover distributions, withholding, receiving-plan acceptance, and amounts that are not eligible for rollover.

4. [4] DOL EBSA: Meeting Your Fiduciary Responsibilities

   EBSA publication explaining fiduciary status, prudence, loyalty, following plan documents, monitoring service providers, bonding, reporting, disclosures, and reasonable plan expenses.

5. [5] DOL EBSA: Reporting and Filing Form 5500

   EBSA Form 5500 Series page describing annual reporting and disclosure for employee benefit plans.

6. [6] IRS: Instructions for Form 5500-EZ

   IRS instructions for one-participant retirement plan annual return thresholds and filing mechanics, relevant when a small plan may not file the full Form 5500 Series.

7. [7] IRS: Instructions for Forms 1099-R and 5498

   IRS instructions for reporting distributions from pensions, annuities, retirement or profit-sharing plans, IRAs, insurance contracts and related transactions.

8. [8] IRS: Instructions for Form 945

   IRS instructions for reporting withheld federal income tax from nonpayroll payments, including certain retirement-plan distributions.

9. [9] IRS: Instructions for Form 1120

   IRS instructions for the U.S. Corporation Income Tax Return, relevant because the standard ROBS structure uses a C corporation.

10. [10] DOL EBSA: Adequate Consideration Proposed Rule Fact Sheet

    EBSA fact sheet explaining adequate consideration for non-public employer securities as fair market value determined in good faith by the trustee or named fiduciary under plan terms and DOL rules.

11. [11] DOL EBSA: Advisory Opinion 1976-16

    EBSA advisory opinion describing conditions for plan acquisition or sale of qualifying employer securities, including adequate consideration, no commission, and eligible individual account plan requirements.

12. [12] FTC: Endorsement Guides, What People Are Asking

    FTC guidance stating that affiliate relationships and other material connections should be disclosed clearly, conspicuously, and close to the recommendation.

13. [13] FTC: Consumer Reviews and Testimonials Rule Q&A

    FTC guidance on deceptive review practices, company-controlled review sites, paid or fake reviews, insider reviews, and independence claims.