For Clients, Advisors and Community

A recent Wall Street Journal article states that women owned businesses struggle when revenues get to the level of $250,000-$499,999. It also cites a 2011 study conclusing that the proportion of woman owned businesses with revenues of $1 million and more is about the same as it was in 1998.  I wonder why this is the case.  If you would like to see the article, please send an email to jay@kaufmanlawgroup.com

It is often (but not always) true that our firm’s clients represent a fair picture of what’s going on in the business world. We are honored to represent woman owned businesses, minority owned businesses and disabled veteran owned businesses. Even in this difficult business environment, all of them are thriving. Many have done well particularly because of the benefits available to minority owned businesses combined with the expertise and enterpreneurship of the owners. From my perspective, almost all of them are among my favorite clients.

By and large, the law has given minorities in this country unprecedented opportunities. From the perspective of my world, I’ve seen many successes.  On that basis, I think the program may be underutilized.  Do you know anyone who is a woman, Hispanic, African-American, other minority ethnic or a disabled veteran?  A business opportunity awaits.

The laws of our country provide special opportunities for women owned businesses and “set aside” programs (particularly in the construction industry) for disabled veteran and disadvantaged business enterprises (DBE). For the DBE program, an individual “graduates” (and can no longer participate in the program) when he or she attains a net worth of $1.32 million (exclusive of the net equity value in his or her home and the value of his or her business). Hence, an individual could have a net worth up $4 million and still be disadvantaged. From a policy perspective, does this make sense?  I’d be interested in my readers’ thoughts on this topic.  Please send me a comment via this blog.

The deduction limits for most company (and sole proprietor) retirement plan contributions increased for the first time in three years!

Highlights include:

• The participant salary deferral limit increases to $17,000.
• The salary deferral “catch up” limit for participants over 50 remains $5,500.
• The total maximum defined contribution for any one participant increases to $50,000.  If the participant is over age 50 and maximizes salary deferrals, it is $55,500.
• The defined benefit plan maximum benefit amount increases to $200,000.
• The maximum considered compensation in a retirement plan for 2012 will be $250,000.
• For Defined Benefit plans, the retirement benefit limit increases to $200,000.

The Social Security Administration has separately announced that the taxable wage base for 20121 is increased to $110,100.

See our more document here: comparing IRS-approved retirement plan contribution limits for 2011 and 2012.

NOW is the time to consider: 

• Tax deductions and contributions for 2011; and
• Planning for salaries and deferral contributions for 2012
• Companies desiring to implement a new retirement plan for deduction in 2011 have an implementation deadline of December 31, 2011.

Please call Jay Kaufman or Kim Kaskel with your retirement plan questions at 847-521-4900.

For Clients, Community, Professional Advisors.

Recently, business and estate planning attorneys have increasingly focused on assisting their clients in protecting their assets from loss due to unexpected circumstances.

The typical business owner will respond, “But, my business is structured as a corporation/limited liability company (LLC).  It’s already protected”.  This is only partly true.

The business has inside protection.   That is, the assets inside the corporation have asset protection.  In other words, if there is an accident in the business, the owner’s personal assets cannot be taken away.  That’s the key advantage of using a corporation or a limited liability company.  However, there is a separation between the business assets and the owner’s personal assets.  It’s a form of asset protection.

In a world of creditors, predators, unforseeable circumstances and divorces, it’s important to take active steps to protect our assets.  In the above situation, the assets inside the business may have some protection, but the ownership interest (the shares or membership interests themselves),-  the  “outside interest” – is not protected in any way.

If the owner of the business is in a major car accident and has a large judgment against him or her, he or she could lose his or her interest in the business in a moment’s time.  Having a corporation does not protect the outside ownership interest in the business from potential judgment creditors and other predators.  Many very smart and sometimes very wealthy business owners fail to understand this fact.

A recent study in New York demonstrated that there were a surprising number of judgments in the prior five year over $5 million dollars.  The study found that there was no correlation between the amount of insurance carried and the amount of the judgment.    Under many court rules, once there is a judgment against you, the court can issue supplementary process to find out all of your assets– no matter where they might be.  This is called a Citation to Discover Assets.  Hence, advance planning is important.

Many states have passed new laws designed to protect the outside interest of shareholders and particularly members of limited liability companies.  As we review our clients’ estate plans and prepare for our business clients’ annual meetings, it is our obligation to bring these new techniques to our clients’ attention.  We have already seen situations in our practice where using simple asset protection techniques has saved our clients and their families significant dollars.

Look for further articles in my blog and for additional information on our website concerning asset protection tools and techniques.

Written for Clients, Professional Advisors and Community.

We’ve been administering pension and 401(k) plans for over 25 years. Invariably, we see the same person employed by a company with two different social security numbers. Or, we’ll see two different people using the same social security number. As my children say, “What’s up that that?”

The (Federal) Customs and Enforcement Service (ICE) recently announced an increase in routine checks to make sure that companies are following the rules when hiring immigrants. Normally, companies get but three days notice before an audit takes place.

Audit failures in this area can lead to additional Federal regulatory audits. The government mentality is that if there is a paperwork problem in one area, the company is a good target in another.

We recommend that our clients perform periodic self audits to ensure that there are no paperwork problems when and if ICE shows up for an audit.

In response to this and other problems facing the small business owners, we’ve developed a unique program which provides this audit and other services including a quarterly review and strategy meeting at a fixed price. For additional information, please call our office.