Glossary - Nexus

ROBS and plan terms

Term	Definition
ROBS	Rollover for Business Startups, an arrangement in which eligible retirement assets roll into a new company-sponsored plan that purchases stock in the sponsoring C-Corporation.
401(k) plan	The qualified retirement plan sponsored by the C-Corporation. The Nexus plan permits investment in qualifying employer securities.
Plan trust	The trust that holds plan assets. In the ROBS transaction, it is the legal owner of the company stock purchased by the plan.
Plan Sponsor	The employer that establishes and maintains the retirement plan, normally the ROBS C-Corporation.
Plan Administrator	The person or entity responsible for administering the plan under its terms and applicable law.
Direct rollover	A transfer from an eligible retirement plan to another eligible retirement plan without payment to the participant.
Funding designation	The tax-character path approved for Nexus funding: compatible pre-tax sources or an exclusive Roth 401(k) path.
Designated Roth account	A separate Roth account within an employer retirement plan, such as a Roth 401(k). It is distinct from a Roth IRA.
Qualifying employer securities	Employer stock that an eligible plan may acquire under applicable plan and statutory rules.
Adequate consideration	The standard governing the price paid by a plan for assets that do not have a generally recognized market. It requires a good-faith fair-market-value determination under applicable fiduciary rules.
Fair market value	The value of an asset in an arm’s-length transaction between informed and willing parties. Private company stock requires a supportable valuation process.
ERISA fidelity bond	Coverage intended to protect the plan from losses caused by fraud or dishonesty by people who handle plan funds or property.
Form 5500 series	Annual employee-benefit-plan reporting forms administered by DOL, IRS, and PBGC. A ROBS plan generally has an annual filing requirement.

Compliance terms

Term	Definition
Fiduciary	A person who exercises discretionary authority or control over plan management or assets, gives investment advice for a fee, or has discretionary responsibility for plan administration.
Disqualified person	A person or entity described in IRC 4975(e)(2), including plan fiduciaries, the sponsoring employer, certain owners and relatives, and some service providers.
Prohibited transaction	A direct or indirect transaction restricted by IRC 4975, including certain sales, leases, loans, services, transfers, self-dealing, and kickbacks involving a plan and disqualified person.
Excise tax	A tax that can apply to a prohibited transaction. IRC 4975 generally provides an initial 15% tax and an additional 100% tax if the transaction is not timely corrected.
Nondiscrimination testing	Testing intended to ensure qualified-plan benefits and contributions do not improperly favor highly compensated employees.
Annual valuation	The yearly process of determining and documenting the fair market value of plan assets for reporting and fiduciary purposes. It is not automatically the same as an IRC 409A valuation.

Company and Nexus terms

Term	Definition
C-Corporation	The corporation used as the sponsoring employer in the current Nexus ROBS structure. It is taxed separately from its stockholders.
Cap table	The company’s record of stock ownership, classes, issuances, and transfers.
Registered agent	A person or company designated to receive official legal notices for the corporation in a state.
Nexus	The customer-facing product for ROBS screening, setup, funding coordination, and ongoing administration.
Client Setup Agreement	The service agreement accepted by an approved customer before paying the setup fee.
Ongoing Services Agreement	The service agreement governing administration after the ROBS transaction is funded.
Dashboard	The authenticated Nexus workspace showing case-specific status, next actions, uploads, records, and ongoing administration.

ROBS overview

Return to the ROBS fundamentals.