Buyer and structure decision tree
Classify the deal before assigning tasks: asset sale, corporate stock sale, plan-owned employer-stock sale or redemption, merger or reorganization, mixed, or unknown. An asset sale normally starts with company assets and liabilities. A corporate stock sale starts with company shares. A plan-owned stock sale or redemption starts with the plan trust as seller or redeemed shareholder. Mixed structures require the boundaries to be written down before proceeds move. [7] [8]
- If assets are sold, identify corporate proceeds, retained liabilities, employees, contracts, IP, taxes, lender releases, and plan path.
- If corporate stock is sold, identify the stock seller, whether the plan sells any shares, whether the corporation is redeeming shares, and why the corporation itself is or is not receiving proceeds.
- If the plan sells or redeems employer stock, confirm plan ownership, valuation support, fiduciary review, custody path, prohibited-transaction analysis, and participant-rights effects. [2] [3] [6]
- If the buyer is family, management, employee, owner-related, plan-related, or fiduciary-related, treat conflict review as a required workstream, not an optional cleanup item. [5]
Phased workflow
Use the tool by phase: exploring, LOI and diligence, structure agreed, documenting, pre-closing, closed, and post-closing. Unknown facts stay visible as follow-up instead of being turned into stale auto N/A.
- Exploring: map possible structures, sensitive-data boundaries, specialists, and red flags without entering price or buyer terms.
- LOI/diligence: assign safe locators for plan stock, ownership, payroll, participant, lender, tax allocation, and consent workstreams.
- Structure agreed and documenting: reconcile purchase agreement schedules to ownership, assets, proceeds recipient, custody path, fiduciary review, and specialist owners.
- Pre-closing and closed: verify approvals, valuation, custody, lender releases, participant rights, payroll/contribution reconciliation, tax allocation, and post-close plan path.
- Post-closing: preserve records, residual obligations, plan continuation/freeze/termination decision, distributions only through professional administration, and final returns or filings outside this tool.
Examples of common ROBS sale patterns
These examples show how the checklist changes by structure without deciding legality, price, tax, fairness, valuation, financing approval, or closing readiness.
- Asset sale: corporation sells selected assets, plan may still own company stock after closing, and the post-sale plan path may be continue, freeze, termination review, or unknown.
- Outside buyer stock sale: identify whether the individual, plan trust, or multiple holders sell shares; corporate approvals and proceeds recipient must match the stock seller.
- Employee or management buyer: related-party, fiduciary, securities, benefit-plan, and participant-rights questions should be escalated even when business continuity looks operationally simple.
- Redemption or plan-owned stock sale: plan-owned stock, independent valuation, fiduciary conflict review, custody path, no personal diversion, and distribution coordination are central.
- Unknown or mixed structure: keep structure, recipient, custody, tax allocation, securities, lender, and post-sale plan path as active follow-up until specialists classify them.
Red flags this checklist is designed to surface
Stop treating the workstream as ready when the tool reports contradictions. The warning is a fact mismatch, not a legal conclusion.
- Asset sale with the plan trust as sole consideration recipient.
- Corporate stock sale with the corporation as sole stock-sale recipient absent redemption or mixed documentation.
- Plan-owned stock transaction while plan ownership is marked no.
- Related buyer with conflict review marked no.
- Closed or post-closing status without current valuation, approvals, or proceeds custody path.
- Distribution contemplated while recipient, custody, or post-sale plan path remains unknown.
- Plan termination complete while the plan still owns employer stock.
- Business winds down while plan continuation is selected without a documented path.
Questions for ERISA counsel, TPA, custodian, M&A counsel, CPA, appraiser, lender, and state counsel
Use these questions to route the right facts to the right professional instead of asking one advisor to sign off on every dimension.
- ERISA counsel: Does the buyer relationship, plan-owned stock treatment, fiduciary process, prohibited-transaction analysis, participant rights, or distribution plan require escalation?
- TPA: Which participant, loan, payroll, contribution, plan-document, notice, Form 5500, and post-sale administration facts remain open?
- Custodian: Where will plan-owned stock proceeds or other plan assets be held, and what evidence shows custody and no personal diversion?
- M&A counsel: Do the purchase agreement schedules distinguish assets, shares, liabilities, employees, contracts, IP, proceeds, consents, releases, and residual obligations?
- CPA/tax counsel: Is Form 8594 applicable, which returns are required, how are final payroll and corporate tax responsibilities assigned, and what state tax issues are outside this tool? [8] [9]
- Appraiser: What current valuation scope supports the transaction-level employer-stock decision, and what limitations should fiduciaries understand?
- Lender/state/securities counsel: Which liens, UCC filings, SBA servicing steps, personal guarantees, licenses, state filings, franchise approvals, or securities questions need written resolution? [10] [11]
Definitions
- Asset sale
- Transaction where the company sells business assets rather than the shareholder selling shares.
- Corporate stock sale
- Transaction where shareholders sell corporate shares; the seller may be an individual, plan trust, or multiple holders.
- Plan-owned stock redemption
- Company buys or redeems employer stock held by the plan trust, requiring valuation, fiduciary, tax, and custody review.
- Safe locator
- A folder, portal tab, binder section, or checklist line pointing to evidence outside this tool without sensitive content.
Source proximity, authorship, date, disclosure, privacy, and related links
Source proximity favors official IRS, DOL, SEC, and SBA materials for the rule boundaries. Authorship follows the site writer profile: evidence-led education by Dennis Shirshikov, not individualized legal, tax, fiduciary, valuation, securities, financing, or closing advice. Published and modified date: August 14, 2026. Disclosure: this is an educational tool and not a provider, buyer, lender, appraiser, CPA, attorney, custodian, or TPA endorsement. Privacy: this checklist code does not read or write cookies or browser storage, does not submit or fetch data, and keeps entered facts in current page memory until reset, refresh, or navigation. Unrelated site/runtime cookies may still exist.
1. IRS ROBS Compliance Project
Official IRS source checked August 14, 2026. It identifies ROBS stock purchases, stock valuation, prohibited transactions, Form 5500/Form 1120, and adverse-tax-consequence issues as compliance-check concerns.
Open source2. IRS Retirement topics: Plan assets
Official IRS source checked August 14, 2026. It describes qualified-plan investment rules, employer-stock limits by plan type, fair-market-value valuation of plan assets, and prohibited-transaction risk.
Open source3. IRS Retirement topics: Prohibited transactions
Official IRS source checked August 14, 2026. It defines prohibited transactions between a retirement plan and a disqualified person and lists sale, exchange, leasing, lending, credit, services, facilities, plan-asset use, fiduciary self-dealing, and fiduciary-consideration categories.
Open source4. DOL Meeting Your Fiduciary Responsibilities
Official DOL publication checked August 14, 2026. It describes fiduciary prudence, service-provider monitoring, participant communications, conflicts, prohibited transactions, parties in interest, and employer-security transaction conditions such as fair-market value and no sales commission.
Open source5. ERISA section 3 definitions
Official U.S. Code source checked August 14, 2026. It defines party in interest, fiduciary, employer, participant, beneficiary, adequate consideration, and related plan terms used in conflict screens.
Open source6. ERISA section 406 prohibited transactions
Official U.S. Code source checked August 14, 2026. It lists prohibited transactions between a plan and party in interest and fiduciary self-dealing/conflict prohibitions.
Open source7. IRS Sale of a business
Official IRS resource checked August 14, 2026. It supports asset sale, stock sale, consideration, residual allocation, and tax-classification boundaries.
Open source8. IRS Form 8594
Official IRS source checked August 14, 2026. It says buyer and seller use Form 8594 for applicable asset acquisitions involving goodwill or going-concern value and purchaser basis determined by amount paid.
Open source9. IRS Closing a business
Official IRS source checked August 14, 2026. It supports final returns, payroll tax steps, EIN/tax account actions, and other business-closing tasks separate from plan administration.
Open source10. SEC small business resources
Official SEC small-business resource verified in Chromium on August 14, 2026 after the reader tool received HTTP 403. It is used only as a broad securities boundary and counsel-routing source; this checklist does not decide securities status.
Open source11. SBA 7(a) loans
Official SBA source checked August 14, 2026. It states borrowers work directly with lenders, existing borrowers use SBA Loan Portal only for SBA-purchased 7(a) loans, and other borrowers continue payment management outside that portal; lender lien, UCC, payoff, and guarantee release details remain lender-controlled workstreams.
Open sourceRelated tools and articles
Use these related pages for adjacent sale, proceeds, stock, valuation, prohibited-transaction, document, audit, termination, and rollover workstreams.
- Selling a business funded with ROBS
- Asset sale vs stock sale in a ROBS exit
- What happens to ROBS sale proceeds
- Redeeming plan-owned employer stock
- Employer-Stock Valuation Checklist
- Prohibited-Transaction Screener
- ROBS Document Checklist
- Audit Preparation Checklist
- Plan-Termination Checklist
- Rolling funds out after a business sale