Owners and Board Members must also remember, in 1996, Unity is also structured to be a holding company. Instead of spinning off Unity’s LLCs as separate operating entities, Unity’s LLCs remain a part of Unity as a subsidiary and are owned by Unity’s shareholders or owners. Because of the number of LLCs that can exist within Unity, Unity had to be structured as a holding company. The primary function of a holding company is to invest in other companies, commonly known as and called subsidiaries. As a holding company, Unity’s Board of Directors, under normal circumstances, will not be involved in the day to day operations of its subsidiaries. Each LLC will have its own management team and the leaders or Directors of these teams report to the CEO, who in turn, reports to the Board of Directors, who in turn reports to the Chair or Co-chair of the owner's committee.

 

Even though Unity, as the holding company, does not participate in daily operations, Unity, as the holding company, can lend initial or ongoing financial support via cash reserves or common stock sales, and can assist in restructuring the operational model to ensure profits. Therefore, Unity, as the holding company, can protect assets, absorb financial losses and limit liability. Overseeing Unity’s subsidiary operations is the responsibility of Unity’s Chief Executive Officer or CEO. Now do you understand why the renegade Joyner Administration did not completely understand their role in 1996 and the limitations of Dr. Joyner's position. At the time of his renegade administration, Unity did not have an operational subsidiary company or LLC to oversee. {CLick here to review and study Unity owned LLCs.}

Unity's Operating LLCs

Unity’s operating LLCs are owned by Unity’s shareholders. As already stated at this website, on the previous web page, each operating LLC has its own management team that is responsible for all day-to-day operations of the LLC. In 1996, team leaders or Directors of Unity’s LLCs would have reported to Dr. Joyner.  In 2015, these Directors will report to President Waymer, who is also Unity’s CEO.  When Unity; as a holding company, purchases an existing operating LLC, it will be allowed to conduct business as usual -- especially if it is profitable. However, Net Profits after expenses are then handed over to Unity for distribution to shareholders.

LLC Ownership

Ownership of LLCs, even when purchased, reverts to Unity and its shareholders. Former owners of purchased companies, who are kept on-board can be given control of the LLC in the form of executive management responsibility, but have no ownership rights, unless they become shareholders of Unity. All major decisions that may affect profitability or involve large expenditures must be approved by Unity’s Board or Directors, with approval from Unity’s shareholders.  Even though Unity is structured for debt free operations, the same is not necessarily true for a Unity owned LLC.  The following report from the Federal Reserve Bank in St. Louis Missouri, might interest some of Unity's shareholders. {CLick here for the St. Louis Federal Reserve Report on Community Development Venture Capital for LLCs.}

 

All Unity’s LLCs

Do Not Have to Be Profitable

 

Even though Unity exists to acquire assets for profits, all Unity owned LLCs do not have to be profitable. Unity is a cash based Corporation. This means, Unity is essentially debt free and will not have to borrow money for operations. Unity grows by expanding participation, not by borrowing money. This creates a heavy tax burden, as it relates to paid in capital. Therefore, owning one or more operating LLCs that lose money can benefit Unity in the form of a business loss when tax time rolls around.

 

This makes Unity ideally suited as a development engine for predominantly African American communities anywhere in the world; and especially, in inner city neighborhoods, where profit margins will be low, breakeven or non existent. According to every reliable financial report, there is very little legitimate developmental capital flowing into inner city neighborhoods due to high crime rates, high insurance rates, high unemployment rates, low skill levels and low discretionary income. However, how Unity intends to overcome these negatives in our development strategy can only be discussed in closed door meetings of Unity’s shareholders. Losing money is not a tax advantage for the LLC. This tax advantage only benefits Unity, the holding company. An operating LLC is responsible for creating profits and its operating income to run the business. If the losses become too great, Unity can shut down the LLC. However, Unity, the holding company, can still benefit because the losses the operating LLC incurred can be used to lower Unity’s overall tax liabilities. {Click here to review & study NHI's report on Race, Opportunity & Uneven Development in Urban America.}

Time Frame for LLC Agreements

 

The laws governing a limited liability company in South Carolina do not establish a time frame for the creation or amendment of a limited liability company agreement. This means rapid start up and operations. Since huge participation fees is not possible in the African American community at home or abroad, Unity’s is structured according to Otis Harrison’s concept of many people paying a little to fund business operations and acquire income producing assets. Therefore, Unity and Unity's LLCs will always have a lot of members. Accordingly, Unity’s LLCs can create an initial agreement directly after the limited liability company is established. Under South Carolina law, an amendment can occur at any time a majority of the members elect to make a change to any initial agreement that was written for management purposes.

Therefore, based on verifiable facts and Black America's historical reality, it is in the best financial interest of Black people living in South Carolina and anywhere else in America, to stop wasting what little financial resources we do have and to start saving our money now; so we can collectively fund, build and own as many corporations as possible, as fast as possible and acquire as many income producing assets as soon as possible. If not for ourselves, then for our children and their future.

 

George M. Sistrunk - 803-347-6638