The Opportunity African American Women Have Been
Waiting For
New Age Capitalism & New Age Corporations
Now You Can Lead The Way To The Future
As a practical
matter, UICI™ (hereafter also called Unity) is; technically speaking, in a start-up position. Therefore, it is extremely
important to understand there will be a period of time in which Unity will not be earning any money. Our most important obligation
and responsibility during this time period is to ensure the Corporate Secretary is paid on time after meetings and her monthly
retainer is received on the first Monday of every month. In addition, there is also a need to pay for printing supplies, refreshments,
mailings to owners and a host of other critical operations that are absolutely necessary during this start-up period. {Click here to learn more about contructive dividends}
Therefore, money
for such necessary items, in addition to the retainer and hourly pay for the Corporate Secretary, includes but is not limited
to money for petty cash, reinstatement expenses, stationery, rents, utilities, office equipment, utilities, PPMs (Private
Placement Memoranda) and inventory. This money will be needed for at least one to three months. One of the simplest ways to
do this is the same way Black Americans have always had to do things...PIECEMEAL... that is to say, everybody giving a little. {Click here for information on a Rule 504 offering with family and friends}
Every owner must
understand, you cannot give a "C" corporation money. Therefore, the most effective way to accomplish Unity's monetary needs
is to LEND UNITY THE MONEY. However, in order to avoid IRS problems, it is most essential that this be done in the proper
way. If we do not, the IRS can maintain that the money is not really a loan. The IRS can charge Unity with violation of federal
taxing procedures and claim the money is really "equity capital". This simply means the money is not repaid to the owner
during the normal course of business and it represents the risk capital stake of the owner. Therefore, the loan would
be considered a dividend, rather than the repayment of a loan, and therefore, the money repaid is taxable as a distribution
of equity. {Click here to learn the definition of equity capital}
The proper way
to lend Unity money is to follow the formalities outlined in the UCC (the Uniform Commercial Code). The Board must pass a
resolution that officially authorizes Unity to borrow money. There must be a promissory note and reasonable interest in order
to evidence a debt. The money loaned must be no more than $10,000.00 and the repayment time should be short, less than 12
months. Reasonable interest must be charged, the note must provide for interest payments, the note must have repayment dates;
as well as, the amount of payments and the note must specify what will happen in the event of default. In addition, the lender
must observe the terms of the note. {Click here to learn more about paid in capital}
The most important
aspect of lending Unity money that needs to be remembered is this: The ratio of shareholder held debt to equity stock
capitalization must be reasonable. That is to say a ratio of no more than 3 to l, preferably, so that the IRS will be
less likely to call the interest a constructive dividend to the lender. When loans to equity capitalization are top heavy,
the IRS can call it "thin incorporation". This simply refers to a top heavy loan investment in a corporation
and too little (thin) "capitalization that is based on shares of stock. If this were to happen, the IRS can
consider all of the contributions as payment for shares of stock, rather than loans to be repaid. {Click here to learn why it is not wise for Unity to borrow money} {Click here to learn more about C Corporations} {Click here to learn why Unity's shares have no par value. The value of Unity's share are based on ledger book entry only}
