Request for some business advice from a widow

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romanchog Jan 19, 2013

I am recently widowed (two weeks and 3 days). I have six children at home and 3 adults children who do not live at home.

I am writing to ask the brothers and sisters who have business experience for advice on what to do with my husband's business. I am seeking for Godly counsel.

My husband had an S-corporation. His "product" was tutoring and teaching math, physics, chemistry, and biology to college students, with specialization in preparing them to take the MCAT (the exam for medical school applications). When he was ill, we closed down his office to save on expenses, so I currently do not have a physical office.

I do not currently have the knowledge to continue teaching everything that he taught. (In his last year of life, he felt the urge to write down all his knowledge and his teaching method. He worked harder than I have ever seen him work. It is as if the Lord was making him write it down for me.) If my adult son was willing to (which he is not at the moment) we could do it together. However, I am able to tutor and teach law school classes and had done that for a year through his business before my husband got ill.

My question is whether I should dissolve his corporation and begin a new business altogether, or whether I should simply transfer his shares to me (he had 100% of the shares) and continue with the business as it is.

Some information you might need to properly advise me:
-- There is a small amount of debt associated with the business (about $2500) that we have been unable to pay. I still can't pay it. If I start fresh, that debt would not be tied to me at all.

-- Most of the students I would serve have never heard of his company. i.e. there is no goodwill attached to the corporation. He was very good at what he did, but because of the nature of what he did, every year the clients changed.

-- In Florida, a corporation can simply allow itself to become inactive by not paying the fee, so there is no big procedure to dissolve it. Of course, I do know that I have to let the IRS know so they don't keep requiring taxes.

--I need to make my decision quickly only because the business taxes (basically the permission to do business) are due before the end of January or the corporation will be fined a lot of money. I have to make my decision by then.

I don't know if I am holding on to the corporation because it is a part of my husband. In my head I see no logical reason to keep it open, but something keeps stopping me every time I plan to dissolve it. I don't know if that is God or just my emotions.

I appreciate any advice you give. Thank you.

In Christ,
Mrs. Natalie Roman

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Compton Jan 19, 2013

Hi Romanchog,

You have been presented with a ball of technical, business, financial, tax, and ethical issues.

Regarding the more technical issues, I believe it is in your best interest to find a professional accountant or CPA to help you unravel this ball. (They will also know if you need additional different professional guidance.) If you don't presently know of an accountant you can trust, you might consider contacting Dave Ramsey's organization or website where they can refer you to one of their endorsed local providers in your area.

https://www.daveramsey.com/elp/tax-services/

Also, if you would be willing, could you provide a way for qualified people here at SI to contact you directly on this matter?

Publicly here, people can certainly offer input to the more ethical or spiritual aspects of your question, but I am reluctant to see the technical or even entreprenurial aspects of your situation addressed openly here in the forum.

Blessings,

MC

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romanchog Jan 19, 2013

Thanks you for your suggestions. My contact information is in my profile, so I did not think to add it to my post.

If there is anyone who can answer my question they can e-mail me at nroma002@fiu.edu

Thanks.

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Compton Jan 20, 2013

Thank you Natalie,

In your recent posts, you have shown me an aspect of Proverbs 31, that I have never considered before; that an excellent wife continues to be excellent to her husband even after he has moved on to be with the Lord.

How touching it is to see Proverbs 31:10-31 through the actions of a noble widow.

"She looks well to the ways of her household, and does not eat the bread of idleness. Her lamp does not go out at night...Her husband is known in the gates, when he sits among the elders of the land."

May the Lord deeply bless you as you walk in faithfulness and vision for your husbands heritage.

MC

"She considers a field and buys it; from her earnings she plants a vineyard. Her husband is known in the gates, when he sits among the elders of the land. She makes linen garments and sells them, and supplies belts to the tradesmen. Strength and dignity are her clothing, and she smiles at the future. She opens her mouth in wisdom, and the teaching of kindness is on her tongue. She looks well to the ways of her household, and does not eat the bread of idleness...Give her the product of her hands, and let her works praise her in the gates."

sermonindex Jan 20, 2013

"Thank you Natalie,

In your recent posts, you have shown me an aspect of Proverbs 31, that I have never considered before; that an excellent wife continues to be excellent to her husband even after he has moved on to be with the Lord"

Amen Compton. That is precious.

If I have one word it is to be careful of letting any stranger (even professing Christians) who emails you have access to your financial matters, and also to remove your email address from your post as it would be safe and wise to do so. Do not let anyone who you do not personally know from this site (except maybe the moderators) "in the door" of your business matters. There are many wicked people who are not to be trusted who could take advantage and some may even have user names on this site.

God bless you and lead you. -Jim

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ccchhhrrriiisss Jan 20, 2013

It is certainly important to be "safe." However, it could be helpful for some believers to assist this family as well (as the Lord leads).

In a previous thread, I asked if she had an email address in case anyone in the SermonIndex body felt led to help. Of course, this is one reason why a local church can be helpful -- to be present in order to assist those in the congregation who are in need.

In this case, I concur with what brother Compton recommended. I would seek a competent local professional (such as a CPA -- preferably a believer) in regard to such legal financial matters. There are also other believers who might be small business owners who can share from their experiences.

It would also be nice for a method by which believers (including those on SermonIndex) might be able to assist a family in need without causing concern over financial security. Perhaps someone has a suggestion to assist others over long distances without too much concern about identity theft or security issues?

sermonindex Jan 20, 2013

The designation appellant to the formation of an incorporated company denotes primarily the way in which taxes are put through the company. Although there are several common advantages to forming a limited liability company the principle one has to do with limiting liability for the benefit of the shareholders of the company. At a taxation level the S type company which is the relevant designation in this instance simply means that the profits of the company (as well the debts) are distributed to the owners by wages and share dividends which they have a legal duty to disclose to the IRS , on which they then directly pay taxes. Whether to trade or not as an incorporated company mostly has to do with writing down costs through the company. There is a point at which it is simply not worth using this type of structure because the inherent responsibility as well as fees etc, may mean that a personal return on a self employed basis would be more realistic. This situation is not sufficiently indebted to require any legal advice. Apart from filing the correct returns, should this company continue to trade there are no other legal requirements whatsoever other than the “self” oriented tax disclosures required to the IRS by individual recipients of wages and share dividends.

The ethical question revolves around the issue of creditors. From a strictly financial point of view all interested parties would normally expect the company to continue and pay or else to close and thereby benefit from the limited liability framework intended by the company structure. As this would essentially be utilities and overheads in this instance, i.e., rent, rates, electricity and water etc, this would be entirely normal because these creditors are unlikely to have the ability to negotiate a payment arrangement based on the supply of goods relationship model. They are more accustomed to either demanding monies or else writing them off. I don’t see how this situation would warrant further indebtedness. Mrs Romans own explanation clearly demonstrates that she understands these points already.

The ethical question regarding creditors may well exceed the intended framework of the incorporated company from the position of honouring God. Were this to be true then I have no doubt that a provision has already been made available. As for the likelihood that emotions can play a part in our decision making then this seems to me to be perfectly reasonable in view of the honourable intentions of the sister to labour with strength and dignity, as the proverb says. Clearly no one but Mrs Roman can make that decision and no accountant can make it for her either. Just to make my own position clear I am married to a qualified accountant and was a company director for 20 years. And just to make the point even clearer I learned about company formations from a lawyer whilst I was serving a prison sentence for robbery in the early 80’s. He was teaching computer programming at the time and took a liking to me. When I came out of prison, having been saved by then, I couldn’t find employment easily due to being honest with potential employers about my imprisonment and thefts. So I followed all that good advice and established myself in business. The Lord always honours honourable intentions and the widow is right at the centre of His protection. God help anyone who defrauds a widow. Praise His name.

As for security well that must be a simple matter of using an intermediary and including that cost in the gift. Most banks have the ability to charge $30 to accept a payment into a holdings account and they then transfer the money to the account of their customer. Beyond that unless someone expressly acts as a go between for small gifts it is impossible to say what one might do other than by using Paypal or the like service. In sharing this publicly it is to give honour to the Lord Who is concerned for the widow and the orphan. It is legendary and shows His mercies are always just. Let him who was a thief learn to rather give, and let the widow be reminded that her husband, who sat in the gate, is remembered by the elders of the land. The Lord’ ways are never our ways. What have we to fear if we put our trust in the Lord.

Regarding entrepreneurial efforts I will e-mail those separately as requested by the Moderators if they are asked for.

Andrew M R Kelly

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romanchog Jan 21, 2013

Thank you all for your concern and your advice. I have contacted Crown Financial Ministries and Dave Ramsey by e-mail. I am not sure if they will be able to assist me. Obviously, this is a long week-end and I don't expect a response yet.

I will get on my knees and ask the LORD for the answer. This is a new position for me, because I usually got on my knees and asked God to show my husband the answer. I have not trained myself to listen. That is my greatest fear in facing the future. I know that God is faithful to answer, but am I a good listener?

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romanchog Jan 29, 2013

I thought I should update this, since I have made a decision.

I received some free advice from integrityresource.org.

This is a Christian organization. I was referred to them by Crown Financial Ministries.

After considering the advice and much prayer I have decided to keep the business open. This brings up other issues that I must pray about for my personal protection and privacy.

Thank you all who prayed and have continued praying for me. It has meant a lot to know that prayer is lifted up for me and that I am not really alone (aside from the Lord, of course).