SELF-DIRECTED IRA LLC FACILITATOR AGREEMENT AND LEGAL DISCLAIMER
SENSE FINANCIAL SERVICES, LLC (“SFS”) and the SFS client specified below (“Client”) agree as follows:
Upon return of a signed copy of this Agreement, payment of the quoted Fee for Services, and submission of a completed Client Information Form, SFS will facilitate Client’s establishment of a Self-Directed IRA owned LLC.
SFS facilitation service includes the following:
As every business is unique and laws vary from State to State, it is impossible for SFS to assure you that the options selected by you are the best for your particular situation. You acknowledge and agree that SFS does not know the specifics of your financial or tax situation and did not provide you with any legal or tax advice. SFS advises you to consult your own professional consultant regarding these matters.
You acknowledge that by submitting an order with SFS that you are allowing us to place orders, electronically or otherwise, with State Departments of Corporation and/or State Secretaries of State on your behalf. You acknowledge that unless informed otherwise, SFS will assume a fiscal year end for your company of December 31. All LLCs will be filed with a perpetual existence or maximum allowable years unless you inform us otherwise. Unless specified on your order, we will assume you request the “LLC” as the ending for the name of your LLC. You also agree to provide a conformed copy executed by you for any matter for which an electronic signature has been attached.
Further, you acknowledge and agree that, after your LLC has been organized, it is your responsibility to make sure that the LLC complies with all State, local and federal laws. Fees paid to SFS do not cover recurring or annual State fees and IRA Custodian set-up and annual fees.
SFS will obtain a registered agent for your LLC in the State of its organization and will pay the fee for the first year of service. By signing this Agreement, you authorize the registered agent to temporarily place a One Dollar ($1.00) hold on your credit card. This hold will automatically expire in 24 to 72 hours. Your card will never actually be charged by the registered agent without your expressed consent. The registered agent engages in this process for identity verification purposes. This is for the protection of you, the registered agent and SFS.
FEE FOR SERVICES:
The Fee charged by SFS for the services specified herein is $2,000.00 and is payable in advance (IL & MA incur an additional $500 charge). All fees paid are non-refundable.
CLIENT’S REPRESENTATIONS AND WARRANTIES:
Client represents and warrants that he or she has provided to SFS complete and accurate information regarding all retirement accounts Client wishes to establish and rollover or transfer. SFS may rely upon such information or any direction Client may give to SFS. Client acknowledges and agrees that SFS shall have no duty to monitor additional actions in the future by Client in regard to Client’s retirement account(s). Client understands and agrees that it is Client’s sole responsibility to contact Client’s consultants and professionals to determine whether future actions Client may take in regards to Client’s retirement account(s) are permissible by law and concerning the tax and ERISA consequences of such future actions. Client understands the eligibility requirements for establishing a retirement account(s) and rolling/transferring retirement funds to the account(s) and Client states that Client qualifies to take such actions. Client assumes complete responsibility for the determinations that (a) Client is eligible for a retirement account(s) each year, (b) all additional contributions Client makes and distributions Client takes are within the limits as set forth by law, and (c) the tax consequences of any and all contributions and distributions are satisfactory to Client.
Client understand that: (a) both ERISA and IRS rules prohibit certain transactions between a retirement plan and “disqualified persons”; (b) as the owner of a self-directed IRA, Client is a disqualified person; (c) certain relatives and entities in which Client (or such relatives) have a significant ownership interest, are likewise disqualified persons; (d) the purpose of the rules is to prevent self-dealing and to minimize conflicts of interest that could adversely affect my IRA; (e) ERISA §§ 406-408 and Internal Revenue Code § 4975 detail these rules; (f) other regulations and notices issued by the DOL and IRS further refine and explain the rules; and (g) since Client’s account is self-directed, it may be possible for Client to direct IRA to purchase nontraditional assets with IRA funds and that some of these transactions could violate the rules. Client further understands that it is very important to examine these rules before investing or otherwise interacting with IRA assets. Client understands and declares that the SFS may provide Client with some general guidance in this area but that does not substitute for legal or tax advice. Client must consult his/her own independent advisor when deciding how to invest IRA assets. SFS, its representatives, attorneys, employees, agents, successors and assigns will not be held liable for the success or failure of Client’s investments.
UBIT and UDFI
Client understands that if IRA funds are invested in certain assets, there could be special tax consequences. UBIT (Unrelated Business Income Tax) applies to IRA investments in active businesses. Client also understands that IRA is expected to invest in long-term passive investments for retirement and cannot run a business itself, so there could be problems if IRA is too active in its activities (such as flipping houses). Active enterprises need to be run in an entity outside the plan. UDFI (Unrelated Debt-Financed Income) applies to passive investments that utilize debt financing.
Client understands that it is important to examine potential UBIT and UDFI consequences when engaging in self-directed IRA investments. Client declares that SFS does not provide tax advice and that client will consult a competent, independent advisor if these issues may apply to client’s investment choices.
“SHORT FUSE” POST-ORGANIZATION FILINGS ARE SOLE RESPONSIBILITY AND EXPENSE OF CLIENT:
Certain states have post-organization filings that are due to the Secretary of State very soon after the entity is filed. Examples of such “short-fuse” filing states include, without limitation: NV (last day of the first month following the organization date for the Initial List of Managers/Members-Officers/Directors; $75 filing fee, $125 late penalty); NM (30 days for corporate Initial Report; $25 filing fee, $200 late penalty); WA (120 days for Initial Annual Report; $10 filing fee, $25 late fee); CA (90 days for Statement of Information; $25 filing fee, $250 penalty fee); NJ (60 days for NJ Business Registration); AL (2 ½ months for Initial AL Business Privilege Tax; $50 minimum penalty). Listed fees and penalties are subject to revision. These short-fuse reports can be filed online by Client even if the hard-copy forms and notices are not in Client’s immediate possession. All such short-fuse filings, related filing fees and penalties are Client’s sole expense and responsibility, and are not included in the Agreed Fee which Client has paid to SFS.
NO PAYMENT OF CUSTODIAL FEES WITH LLC FUNDS:
To pay retirement account custodial fees that may become due, you can request a wire transfer of liquid IRA funds from the LLC bank account back to the IRA and then have the custodian deduct the fees directly out of the IRA.
Please read the following information carefully. You must understand and agree to every term and condition of this Disclaimer.
The information contained in this Agreement should not serve as a substitute for legal advice from an attorney familiar with the facts and circumstances of your specific situation. You understand and agree that SFS is a mere facilitator and is not acting as your attorney in any way. The information provided by SFS to you through mail, emails, or phone conversations is not legal advice. You are advised that you should consult competent legal counsel of your own selection regarding any legal questions which you have regarding incorporation, LLC formation or other business filings like dissolutions, amendments, annual reports, etc.
Any and all fees paid to a State Department of Corporations or State Secretary of State or to local correspondents cannot be refunded under any circumstances. At the sole discretion of SFS if an entity is deficiently formed and/or an error is made on our part, SFS will undertake reasonable efforts to cure and amend any necessary documentation, or will refund the fees paid to SFS.
SFS DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT WILL SFS BE LIABLE TO YOU FOR DIRECT, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS OR INCOME. IN THE EVENT OF ANY CLAIM YOU MAY HAVE AGAINST SFS, YOUR SOLE RECOVERY IS, AFTER THE RETURN ANY MATERIALS YOU HAVE RECEIVED FROM SFS, A REFUND OF AMOUNTS YOU HAVE PAID SFS.
If for any reason by operation of law or otherwise, any of the foregoing limitations of liability is voided, then in such event, Client agrees that SFS’ liability for damages, if any, shall not exceed the amounts paid by Client to SFS under this Agreement.
No actions regardless of form arising out of any of the transactions under this Agreement may be brought by either party against the other more than one year after such action accrued.
ARBITRATION OF ALL DISPUTES:
Any controversy or claim arising out of this Agreement (whether contract, tort, or both), or the breach of this Agreement shall be arbitrated in Orange County, California, in accordance with the then existing applicable Rules of the American Arbitration Association. The award of the arbitrator(s) shall be final and binding on the parties, and judgment upon the award may be entered in any court of competent jurisdiction. Each party shall bear its own costs, attorneys’ fees and its share of arbitration fees. This Arbitration provision does not constitute a waiver of the parties’ rights to a judicial forum in the instances where arbitration would be void under applicable law. This provision is voluntary.
(a) Conditions of Services. Until the conditions specified in this Agreement are met by Client, SFS has no obligation to provide services. Some documents cannot be completed nor some services provided without accurate information being provided by Client. If Client does not provide such information as requested by SFS in a timely manner, SFS shall not be responsible for any resulting delays or nonperformance.
(b) Limitations on Scope of Services. The services provided by SFS do not include tax services or tax return preparation for your entity. The services provided by SFS do not include any representation of you or your entity in any proceedings before any State or federal agency, bureau, board or court. The services provided by SFS do not include legal services; SFS is not performing services as your attorney. The Fee for Services paid by you to SFS does not include or cover any State fees for annual reports, franchise fees or taxes, business taxes, business licenses, or any other periodic maintenance fees, costs or taxes. SFS has no responsibility for filing any fictitious or trade name registration (“DBA” filing). In the event Client changes any of the entity information from that initially provided to SFS, such as business address, resident agent information, or other such changes, it is Client’s responsibility to notify any administrative agencies of such changes, including any notifications to a Secretary of State or the IRS.
(c) Annual Franchise Fee In CA Is Sole Responsibility Of Client. California has a larger than typical franchise fee for Limited Liability Companies, The CA Franchise fee minimum is $800 for any portion of a calendar year that an LLC is in existence. This fee is the responsibility of the Client. By signing this agreement, Client is indicating that he/she is responsible for and aware of the CA Franchise fee or any other state imposed fees, CA or otherwise. If the client, at any time, deems the fee too high to maintain their Self-Directed IRA LLC in the state of California, it is the client’s responsibility to complete all necessary filings and notifications. In the event Client lives in CA and elects to file in another state, Client understands that the LLC may be liable for the $800 minimum CA franchise tax. Client accepts full responsibility for any decision client makes for the Self-Directed IRA LLC to pay or not to pay the $800 minimum CA franchise tax, and Client releases SFS from any liability with respect to the $800 minimum CA franchise tax issue.
(d) Waivers. The forbearance of any right or waiver of any provision in this instrument shall not constitute a waiver of any other provision, and no waiver shall constitute a continuing waiver.
(e) Successors. Subject to any restrictions against assignment, this instrument shall inure to the benefit of and be binding upon all successors and assigns of each party.
(f) Notices. Any notice, demand or communication under or in connection with this Agreement which any party desires or is required to give to any other party shall be in writing and shall be given by personal delivery, or by mailing in the U.S. mail (in a certified or registered envelope) to the mailing addresses set forth herein, or by electronic mail at the email address set forth herein.
(g) No Third Party Beneficiaries. Nothing in this instrument shall be deemed to confer any benefit on any person who is not a party to this instrument.
(h) No Assignment. No part of this instrument may be assigned by Client without the prior written consent of SFS. Any purported or attempted assignment in violation of this paragraph shall be void.
(h) Modification. No provision in this instrument may be modified except in a writing signed by the parties.
(j) Governing Law. This instrument is made underCalifornia law, and the proper place of jurisdiction and venue for any dispute concerning this instrument shall beOrange County,California.
(k) Further Assurances. Each party shall make, execute and deliver such other documents and instruments as may be reasonably necessary to carry out the purpose of this Agreement.
(l) Construction. No uncertainty in this instrument shall be interpreted against the drafter of the provision.