Private Company Investing
Private company investing is when you purchase stocks in a private, not publicly held, company. Iconic companies such as Google and Microsoft started out as private companies. If you are like the savvy investors who first invested in Google and Microsoft and you know of a private company that is offering stock options in their company, then you will be glad to know that you can use self directed IRAs to purchase private stocks or limited liability companies commonly called LLC’s.
Investing in private companies with your self directed IRA or Solo 401K is easy. You simply fill out a buy direction letter directing our staff to purchase the shares on behalf of your IRA. Once you have signed any documents related to the purchase as ‘read and approved’, American IRA will purchase the shares as you had directed. It really is that simple! All shares will be titled and vested in the name of your IRA in direct proportion to the percentage your IRA owns. American IRA, LLC, FBO, Your Name, IRA.
A few simple guidelines to keep in mind with private company investing:
- You cannot invest in a private company that you or any prohibited person owns, manages or controls.
- Income must be paid to your IRA according to its percentage of ownership (i.e. If your IRA owns 30%, receive 30% of all income).
- An annual Fair Market Valuation must be provided by the company management on an annual basis and submitted to American IRA.
As with all investments, it is important that you consult with professionals and do your ‘due diligence’ on each investment. Professionals that would be helpful with your private company investing would include but not be limited to: attorneys, financial advisors, and CPAs.
As a self directed IRA administrator we are a neutral third party. We do not make any recommendations to any person or entity associated with investments of any type.
At American IRA, we do this every day. We have simplified our process so that you can quickly and easily take care of your private company investment transactions. If you would like to open a new account or have questions about opening a new account, please contact our office 1-866-7500-IRA(472) or sean@americanira.com. If you are an American IRA Client and you have questions regarding the investment process, please contact our office 1-866-7500-IRA(472) or transactions@americanira.com.