April 1, 2021 Meeting Notes

/

Please ensure your profile on ASAP website is up to date and has your picture!

  • 2nd Monday of every month check out Woodard’s lunch & learn

  • Next asap happy hour is on 3/15

  • Next ASAP lunch in learn is 5/6

How to Start, Change, or Close your Business

Intro & Agreements

My Student Loan Story

  • Please use Hand & Chat in Zoom- This is being recorded.

  • Please share this info by copying the title (It’s a hyperlink;) andor the web address 

    • AND give credit where credit is due. 

    • This information took hours to compile based on years of experience. 

    • It is copywritten so do not consent to it’s replication without prior written approval. 

  • Links

  • Disclosure

    • This presentation is entirely separate from Nandi’s activities as a Registered Investment Advisor and Financial Planner. It is not meant to be a solicitation or advice. Please consult a trusted professional for on your specific situation. Some referrals/resources pay Nandi/F.L.I. a fee. 

  • About your Presenter Nandi Pathefinder (ChFC®), CRD# 5064515,  OR Ins Lic 8378160

    • Financial Planner, Investment Manager, Coach, & Consultant since 2005. 

    • My passion is finding fun ways to have the most respectful relationship to the planet and all its inhabitants as possible. 

    • Currently focused on building a better system to replace the old one. Specifically with content creation and collaboration to empower our most vulnerable and oppressed communities. 

  • Contact info 

Getting Started

Creating your unique vision and lifestyle

  • Business Plan

  • What are you Worth? 

    • USA GDP PerCapita is $62K according to World Bank & we work an average of 1800 hrs a year according to OECD or about $35 an hour. Vs Switzerland at $43.

    • Sheet Link

      • Start with Your Budget and Survival Vs Thrive Amounts

      • Percentage prices/ sliding scale for social justice AKA RobinHood

      • Subscriptions & recurring revenue 

  • Why start your own business

    • Net Income/ MAGI/ “Above the Line” deductions

    • Hobby Vs business loss 3 out of 5 years! & set up your benefits before you resign;) 

    • Residual & Recreational Income- Referrals, Products, Gift Marketing & Prospecting.

    • Tax Avoidance Vs Evasion. Legal Deductions…

      • 57.5 cents a car mile from home office

      • Software, Equipment, Supplies, and space for home office.  

      • 50%-100% of Meals (not entertainment) Detailed Article

      • Gifts with your brand on it. 

  • Based on Individual Tax Rates 2020 and based on Net Income. 

    • Survival= $12K - $17K ($1000-$1,500 Month) 

      • $12,400 Fed standard deduction

      • $12,760 is Federal Poverty Line

      • $17K Is threshold for OHP/(Medicaid) 

      • $19K Student Loan (150% FPL) 

      • Try to maximize your Roth IRA $6,000/Yr per individual. 

    • Cruising= $20K= $40K ($1,666- $3,333)

      • $40K goes from 12% to 24% Tax rates

      • SE (self employment) tax still 15% 

      • QBI is 20% deduction But limited by w-2 income

      • Try to Maximize your Deductible Qualified Plans

        • HSA $3,550/Yr (+$1K over age 55)

        • 401K $19,500/Yr (+$6,500 over age 50)

        • SEP $57K/Yr or 25% of Income (but spread out to Employee’s)

        • SIMPLE $13,500/Yr

      • Vote with your Dollar and start to Donate

    • Thriving= $40K- $113K ($4K- $10K Month) 

      • $73K ATM (Alternative Minimum Tax)

      • Individual Tax Rates go as high as 37% 

      • Corporate tax rate is 21% 

      • Same for UBI (Unrelated Business Income) 

      • Giving Back in 2020 and beyond?

        • $300 Extra on top of Standard Deduction for Charitable Contributions

        • Individuals can Donate 100% of their Income (Formerly 60%)

        • Corporations can Donate 25% of their Income (Formerly 10%)

  • Decide on your Business Entity

    • *Corporations have to be Capitalized and Maintained.

    • *Joint Ventures & Liability

    • Sole Proprietorship/Partnership  

    • S- Corp= Simple

      • “Pass-Thru” income and required to by Owner reasonable Salary. 

    • C- Corp= Complex

      • Can Retain Earnings but dividends are taxed double. 

    • LLC= Goes both ways. 

      • Single Member= Disregarded Entity Federally 

    • Sub Chapter T= Co-Op

      • Retain 80% earns tax free. 

      • Distribute without double taxation.

    • 501c3 “Non-Profit” or Tax-Exempt

      • Look at getting Fiscally Sponsored to get going

      • Lots of Free Perks like Google Adwords. 

    • Even more types like Communes and Social Benefit Corps. 

Filings, Formation, and Red Tape

The Only Constant is Change!?

Insurance, Collaborating & Exit Plans

  • Saint Benedict said, “Keep death always before your eyes”

  • Buy-Sell Planning

    • Doesn’t need to be funded- but you likely want it to. 

    • Cross Purchase- Buy insurance on each other and Increase Basis. 

    • Entity Purchase- Business Buy’s for each person and doesn’t increase basis. 

    • One-Way is great when family is involved

    • Don’t forget Disability and Disability overhead coverage

  • Closely Held Businesses and Planning with Gold

    • In my Experience Employee’s value benefits more than Income

      • ERISA Generally what you do for one Class of employee you have to do for all 

      • Payroll deduct IRA’s are a great way to get going. 

      • I’m not a fan of AD&D and most Indemnity plans

      • Disability income you generally don’t want to deduct cu makes benefit taxable

        • Long Term Care is an Exception

      • ESOP= Employee Stock Ownership Plan is a formal way to do it. 

      • You can also make private agreements.

      • 401k plans when maxed out can evolve to Profit-Sharing Plan 

    • SERP= Selective Employee Retirement Plan

      • Use for Key Employee’s andor one’s you are grooming to maintain

      • Can be separate from Qualified Plans and rules

      • Can allow deferred Income

  • Bringing in Partners, Moving, andor Selling

    • Check with new regulators if you or the business move to a new state. 

    • Sole Proprietorship/Partnerships make private deals

    • S/C corps swap shares. You sign over the stock certificate. 

    • LLC’s swap units, Check your subscribing agreement

  • Business Valuation

    • Points to consider

      • 2x earnings (net or gross)

      • Goodwill

      • What is buyer going to do with it?

      • Consider Clients and employees? 

    • Who to ask

      • Ohio National Life

      • Local Credit Union

      • CPA

      • Business Broker

Communicating your niche

  • Where do you thrive in your Econo-System? 

    • Wolves Restored Yellow Stone 

    • Permaculture - Look at the 12 design Principles. (Watch, Learn, Yield, Share)

    • Make your own Metaphor 

      • Actions I Love….

      • Wasted Resources… 

      • Ways I help my Econo-system… 

      • My Econo-System Creature is… 

  • Sandler Sales- Don’t Get ahead of the Pendulum. 

    • Be confident that you are helping! 

    • It is about the experience, not the product/Service

    • Find the pain & get them to ask you for help.

    • Write your Elevator Speech...

Closing (Or I like to call it “Composting”)

  • Bankruptcy is different… get a Lawyer. Article for more info.

    • Chapter 7 bankruptcy doesn’t require a repayment plan but does require you to liquidate or sell nonexempt assets to pay back creditors.

    • Chapter 11 bankruptcy is a business reorganization plan, often used by large businesses to help them stay active while repaying creditors.

    • Chapter 13 bankruptcy eliminates qualified debt through a repayment plan over a three- or five-year period.

  • Overview of “Winding Up”

    • The main goal with to undo the checklist from Filings, Formation, and Red Tape

    • Consider going dormant instead of closing

    • Make sure you honor your constituents and reputation. 

    • It is relatively simple (Vs. Easy?) and a matter of giving notice, payment, and liability. 

    • The majority of the work is with your State. 

  • By Entity

    • Sol-prop & partnerships- don’t have to tell the state you just stop.  

      • But you might want to just close EIN

      • Partnerships still have liability- so more important to legally separate

    • If done well & right a Corporation can limit your liability. 

      • Different corps = different tax implications

    • LLC can file with state that it doesn’t exist

      • Check operating agreement for how to wind up (& set up)

  • Checklist & Links

    • IRS business closure checklist 

      • How to file your final return for your business

      • Paying any due taxes to the IRS

      • Closing your IRS business account

      • Canceling use of any EIN established with your business

    • OR instructions & OR State Resources

      • Thoughts

      • Payroll & final paychecks

      • Layoff alternatives/requirements

      • Licenses

      • Going out of biz sale

      • Reinstate

      • Other info

        • Non profit. 

        • Become a Benefit Company

    • Other Help

      • SBA Close or sell Biz

      • Dissolution of Business Entity Notes Is a great overview by Cameron Chavarria. They are a paralegal and my neighbor, their contact info is in the doc if you need assistance in legal filings and are looking for a consult? 

      • Free Guide

        • Registered agent $125/year

        • Name no longer protected after 45 days if late on annual filing 

      • Legal Zoom for $129+filing fees. 

      • NOLO LLC in OR

        • Look at formation docs/ voting, etc. 

        • File dissolve with SOS $100

        • Winding Up & normal order of payments

        • Notice to Creditors (optional) 120 day minimum. Also/or newspaper

        • Check “final return” box on your IRS Form 1065 when you file your final federal tax return. (no clearance requirement in OR)


Best resources to get going at any scale