UICI Shareholders/Owners
UICI's Section 1244 Stock
Owner & Principal
Steps & Reasons To Establish A New Corporation
The Power Of Passion
Understanding Regulation A +
UICI's Section 1244 Stock
Understanding Pre-Incorporation Expenses
Understanding Gifting & The Gift Tax
Excerpts From Dr. Boyce Watkins - 10 Commandents of Black Economic Empowerment
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An Introduction To
UICI™’s Section 1244 Stock

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Directors of Unity International Company, Inc.™, (hereafter also called UICI™) will act as though it is a policy of UICI™; during this early stage of its development and growth, to thoroughly examine the proposed “Small Business Corporate” status for UICI™ so that no monetary loss will be experienced by UICI™’s shareholders/owners during UICI™’s initial growth stage. This is achieved by establishing a policy that will organize and manage UICI™’s corporate affairs so that during this initial growth stage the corporation maintains its qualification as a “Small Business Corporation” as defined by IRC Section 1244. {Click here to review "Start-up Costs & Organizational Expenses Are Deducted Over 180 Months"}
Section 1244 gives the shareholder/owner the advantage of treating any loss he/she/they (those filing joint returns) incur as an “ordinary loss” on his/her/their Federal Income Tax Return(s). This can be as high as $50,000.00 for an individual or $100,000.00 in case a joint return is filed. Naturally, it is difficult, if not impossible, to find 2,000 people in Orangeburg’s Black community that can invest $50,000.00 or $100,000.00 in a corporate venture. This is why UICI™’s stock; at the Founder’s level, is priced so low when compared to other ethnic communities in America. Without the shelter of Section 1244, any loss must be treated as a “capital loss”. {Click here to review qualified "Small Business" Stock & 1244 Stock}
Shareholders/owners and UICI™ have nothing lose by limiting UICI™’s initial funding to $1,000,000.00 so that the corporation qualifies as a “Small Business Corporation” pursuant to IRC Section 1244. The provisions therein can only operate to the advantage of UICI™ and the shareholder(s)/owner(s). If for some reason the corporation fails to qualify by exceeding one million dollars in capitalization, then the shareholders/owners and the corporation are left in the same position as though the Board of Directors never attempted to qualify and no such policy was ever enacted. {Click here to review the minutes from April 9, 1996} {Click here to review the minutes from April 16, 1996 item #9}
In 1996, the Joyner Administration never passed the Resolution that authorized issuing 2,000 shares of common stock in order to comply with IRC Section 1244. If you will review the 1996 List of Allegations, the number one allegation was a failure to pass badly needed resolutions. Authorizing the designation of 1244 Stock was one of those badly needed resolutions. {Click here to review the August 21, 1996 List of Allegations} {Click here to review the History of UII's 1244 Stock}

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1244 STOCK ELIMINATES RISK FOR SHAREHOLDER/OWNERS
 
Individuals that choose to participate is UICI™’s asset acquisition programs during our early stage of growth and development can eliminate their fear(s) or notion(s) of loss and/or risk with UICI™’s Section 1244 Stock. Consequently, any such fear would be irrational if an individual is a taxpayer. There is no risk and there is no loss except in the person’s own mind; when an individual receives UICI™’s . To paraphrase Lavern Washington: “When it comes to $500.00 to participate in an acquisition program, it's a no brainer. The average person spends more than that on junk food.”
Despite the fact that ignorance levels are extremely high at all levels within the Black community, from State Senators, Bishops, Pastors and college professors to factory workers, government workers and welfare recipients, when it comes to corporate ownership, there is nothing out there but a sea of absolute ignorance when it comes to these matters. Therefore, the Board of Directors should have no doubt when it comes to the magnitude of the opportunity that will be presented to the Black community and the magnitude of the challenge when so many are fearful and ignorant. {Click here to review the Mystery of UII's Early Success}

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THE REVENUE ACT OF 1978
 
THE REVENUE ACT OF 1978 MAKES COMPLIANCE EASIER!! When you consider the fact that the Act (Public Law (PL) 95-600, Section 345) suggests that a corporation does not have to do anything to qualify. If at the time of loss, the corporation meets the requirements of Section 1244, the benefits to the shareholders/owners are automatic. Yes! Section 1244 does not require UICI™’s Board of Directors to draft and adopt a formal affirmative plan to qualify as a 1244 “Small Business Corporation”, however, if the Board of Directors is unaware of Section 1244’s simple requirements as defined by the code, UICI™’s common stock may not be “Section 1244” at the time a loss might occur. Therefore, the Chief Financial Officer should monitor paid in capital on a regular basis so that UICI™ stays within the guidelines so that overfunding does not occur. In addition, regular funding reports should be made to the President and Vice President; as well as, to the Treasurer of the Standing Committee to ensure compliance.

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COMMON PRACTICE & SECTION 1244
 
It is a common practice to have the shareholders/owners put up some money as capital and the rest in loans to the corporation. However, due to the fact, loan repayments can be considered as dividends to the shareholder; especially, when no Promissory Note is recorded in the records, the government has been attacking the validity of shareholder loans with increasing success. With the increased difficulty of securing interest deductions on shareholder loans, IRC Section 1244; as a capitalization model, has become more important than ever.
Thus, this section of public law that was first enacted in 1958, is truly a relief section so that at least 2,000 people in the Black community can own and operate a corporate enterprise. Failure to qualify or adhere to the terms of IRC Section 1244, merely leaves UICI™’s shareholders/owners in the same position as though the Board of Directors had done nothing to comply with the code. Section 1244 Stock gives UICI™’s shareholders/owners the unique advantage of saying, “Heads..I win.. or Tails...I win and the corporation loses if the Board fails to meet the requirements of Section 1244. Therefore, the REVENUE ACT OF 1978 has made compliance with Section 1244 much easier.

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REVIEWING SECTION 1244 IN PRACTICAL TERMS
 
FIRST: In practical terms, operating under Section 1244, during UICI™’s early growth and development frees the Board and the Standing Committee from the restrictions and requirements of Regulation D. Neither the Board, nor the Standing Committee has to concern themselves with finding accredited investors that earn $200,000.00 annually or $300,000.00 jointly. These requirements alone, virtually eliminate the entire Black community in Orangeburg and everywhere else on Planet Earth.
SECOND: As a policy matter, operating under the guidelines of Section 1244, allows the Board to offer 1244 Stock to anyone with $500.00. This immediately expands UICI™’s ability and capability to give more people in the Black community the opportunity to become shareholders/owners of a major corporate enterprise. Since the signatories to the "Declaration & Attestations of Exclusive Use & Co-ownership" own the copyrights, patents, registration and/or trademarks, they do not have to pay any more money. This will be discussed more thoroughly in General Meetings with the Standing Committee and during meetings of the Board of Directors. [If you are a signatory and do not have a copy contact the Secretary of the Standing Committee]
To illustrate how IRC Section 1244 works to the benefit of the corporation and the shareholders/owners, the following example is not indicative of the Black community, however, it is indicative of other ethnic communities in America. IRC Section 1244 provides the shareholders/owners of a “Small Business Corporation” (SBC) as defined by the code, to treat up to $50,000.00 on an individual return, or $100,000.00 on a joint return each year as an “ordinary loss” rather than a “capital loss” in the event the corporation fails to perform as anticipated.
Assume Mary Fletcherstreet invests $80,000.00 in a “Small Business Corporation” (SBC) and Johnny Colemanstreet invests $120,000.00. Both are married. Assume further, that two years down the road, the “SBC’s” stock becomes worthless. Instead of an $80,000.00 long-term “capital loss”, Mary has an $80,000.00 “ordinary loss” to deduct on her Federal Income Taxes on a joint return and Johnny has $100,000.00 to deduct as an “ordinary loss” and $20,000.00 as a long-term “capital loss”, instead of the entire $120,000.00. As far as the “SBC” is concerned, under Section 1244, the “SBC” loss can be used as a net operating loss deduction, whereas, a "capital loss" cannot be used. Whatever loss that might be experienced in the Black community will be $500.00 times the number of shares an individual purchases. {Click here to review Understanding UII's Capital Stock}

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THE RELIEF PROVISION OF SECTION 1244 & QUALIFICATIONS
 
This is extremely important for the Board and the Standing Committee to realize, the relief provision of Section 1244 is only available to shareholders/owners who receive their stock directly from Directors of the corporation and no one else. In addition, the protection against loss is limited to individuals or partners and no one or nothing else. There is no protection for stock held by corporations, trusts or estates. The loss on the stock does have be related to the stock becoming worthless. It is applicable to any loss, including being sold or exchanged.
In order for UICI™ to take advantage of Section 1244 and qualify as a “Small Business Corporation”, no formal election need to be filed with the Secretary of State or with the IRS and no complicated planning need to take place. All the Board of Directors have to do is follow the following guidelines. {Click here to review 26 USC 1244}
1. The corporation is a domestic corporation.
2. The stock issued is common stock
3. The aggregate amount of money received for stock cannot exceed 
    $1,000,000.00.
4. The stock issued was issued for money or property.

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ADDITIONAL ADVANTAGES OF SECTION 1244
 
Another advantage of UICI’s Board, capitalizing under Section 1244, as a “Small Business Corporation” is this: If UICI™ has not been in existence for 5 taxable years that ends before the date any loss was sustained by the shareholders/owners, the period of UICI™’s taxable years ending before such date of loss can be used. The period UICI™ was in existence shall be used if it is less than 1 taxable year . In addition, the gross receipts requirement does not apply if UICI™’s deductions (other than deductions for net operating losses and dividends) exceeds UICI™’s gross income.
In the past, the IRS adhered to a very strict interpretation of Section 1244 and did not permit the contrived conversion of a “capital loss” to an “ordinary loss”. In the past, the Courts also held, in several cases, that a corporation cannot adopt a plan to issue 1244 Stock for the purpose of exchanging it for pre-existing debt, i.e., outstanding notes and/or bonds.
Furthermore, it is possible for UICI™ to issue common stock that will qualify as Section 1244 Stock and still issue Preferred Stock to capitalize to 5 Billion dollars, or a second class of common stock. However, any other class of common stock The original issue of common stock will still be Section 1244, but the Preferred Stock will not.
South Carolina & Federal
Laws Governing Unity's Operations
 
15 US Code 77b, (Definition of Securities),
15 US Code 78n, (Proxy Voting),
 
 
 
Standing Committee - A permanent committee, as of a legislature, society, etc., intended to consider all matters pertaining to a designated subject. The highest policymaking body of an organization that is composed of its leaders, elected officers and/or elected representatives. {Click here for more infor mation relative to Securities}
The Standing Committee the owners established on August 28, 2015, reports to the owners and/or principals of Unity. {Click here to review the August 28th Resolution}
The Board of Directors report to the Standing Committee whenever a meeting is called. Principals or owners have access to any and all information relative to the progress of Unity..and can contact Compliance Directors for updates during normal business hours at the Registered Agent's office.
George M. Sistrunk - 803-347-6638
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2015-2016 George M. Sistrunk.  All Rights Reserved. POB 217  Orangeburg, SC 29116 - Fax: 803-268-0716
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