By Jill Nagy
Altek Energy Systems’ president is selling the company to the employees and it will not cost them a penny, he said.
Mike O’Connor, currently the owner and a co-founder of the company, created an employee stock ownership plan (ESOP) that will hold the company’s shares on behalf of the employees. As people retire or otherwise leave the company, they will receive the value of their shares.
Shares will be allocated among the employees based upon the amount of time they have been with the company and how much they earn. Their shares will vest over a five-year period.
O’Connor said the new corporation will be what is known as a Subchapter-S corporation. Subchapter-S corporations do not pay corporate income tax. Rather, their earnings are allocated to the shareholders and taxed as regular income.
As a conventional corporation, Altek pays $400,000-500,000 in taxes a year, O’Connor estimated.
After 40 years with Altek, O’Connor said he sees the transition as a graceful exit strategy. It will leave the company intact and allow him to remove cash from the company. He also foresees considerable tax savings.
Business Report: Is Title Insurance A Four-Letter Word?
By Dan Wade, Esq.
We’re all familiar with auto insurance, health insurance and homeowner’s insurance, but what do you know about title insurance? Do you know if you’re covered?
Owning a home is likely the biggest investment you’re ever going to make. And like most homeowners, the “American Dream” comes with a mortgage attached. It’s safe to bet that as the mountainous stacks of papers were being shuffled around during your real estate closing, you may not even remember that you purchased title insurance for the lender.
Lenders require this to protect their security. It’s important to note that the title insurance you purchased for the lender, sometimes called a loan policy or mortgage policy, only covers losses incurred by the lender. It does not cover you. At the closing table, you would also have been offered an owner’s title policy.
Business Report: Insurance Concerns For At-Home Offices
By Melissa Davidson
2020 has been unlike any year before it. Did you ever think that your four-legged friend would be your new co-worker? Or you’d become a full-time teacher while your children learned from home?
For many people, COVID-19 required you to work from home instead of the office. Maybe it has been more cost effective to be able to work from home, but are you sure your type of business is covered by insurance while doing so?
Setting up headquarters at your home does not necessarily mean homeowners insurance will adequately protect your operations. Actually, home-based business activities may void your home insurance.
So now, what questions do you need to ask yourself?
The answer may depend on what kind of home-based business you are operating. Do customers or clients come to your home? What is the value of your business property? Do you hire employees? Do you use your car or other vehicles during your business operations? Do you have clients or employee records on your computer? If you had a loss that damaged your home, would you lose income if you had to close your business?
Business Report: Health Savings Account For Your Retirement
By David Kopyc
The average 65-year-old couple will spend $285,000 on medical expenses in their retirement and this figure does not include any long-term care expenses.
Healthcare continues to be one of the greatest expenses and concerns for retirees and individuals considering retirement in the near future.
Unlike your parents’ generation, most of you will not have any employer or union-sponsored health benefits. Therefore, healthcare costs will likely consume a larger portion of your budget in retirement and you will need to plan for this well in advance of your date of separation.
Small Businesses Should Consider Risk Management Policies To Mitigate Damages
By Rachel Phillips
The nature of business often requires some level of risk taking, but not all risks a business owner faces are under their control.
For example, an employee may be injured in an accident, or a security breach could result in data loss or theft. While no one can completely avoid all potential risks, partnering with a qualified insurance or risk management provider can identify where they might be vulnerable and create a plan to manage and mitigate damages.
Thomas Flynn, co-founder, president and CEO of Jaeger & Flynn, with offices in Saratoga Springs, Clifton Park and Glens Falls, said all risk management processes follow five basic steps: Identify the risk, analyze the risk, evaluate or “rank” the risk, treatment, and monitoring the risks regularly to assess whether they’ve changed.
Business Report: Compensation Package Concerns
By Rose Miller
With the frequent changes in wage and hour laws, many companies are struggling with decisions regarding increases in pay. Minimum wage will be increasing again in December. The end of the year is also a time when employers are evaluating performance and employees are evaluating their jobs and their pay.
Although pay dissatisfaction is only a symptom of job unhappiness, it can be the excuse on whether an employee decides to stay or leave. Many companies have advertised their company’s record high in sales and profits yet not have it translate to increases in pay for workers. The new laws passed regarding pay history and pay equity have female and other workers wondering if they are being paid equally and fairly.
Business Report: Business Doesn’t Have To Die With You
Brian M. Johnson, MBA, CLTC
Are you a business owner or manager in a business? Yes? Then ask yourself: If you, a key manager or top sales person retired, became disabled or died yesterday, who would own or manage your business today? Would you want your business interest sold, liquated or retained by a family member or other key employee?
Do you have a partner in your business? Could the business continue without him/her? Would you want to be in business with your now deceased partner’s spouse?
These are critical issues to address sooner than later. Unlike corporations with hundreds or thousands of employees, with layers of management, small business owners and key employees often play a paramount role in the day-to-day success of that business. As a business owner, you probably know what it’s like to be responsible for budgeting and hiring, while also running out to shovel the sidewalk in front of your office or store. In many cases, YOU are that business.
Lets look at three objectives, with corresponding questions, you might consider in developing a continuation plan.
Objective: Retain the business interest for family.
Consider Business Interruption Insurance In The Event Of Flood, Fire Or Natural Disaster
©2018 Saratoga Photographer.com
By Maureen Werther
The recent damage to the Saratoga Springs City Hall after being struck by lightning may have prompted some business owners to look at their own insurance policies and see if they have business interruption insurance.
What would happen to a business if an unforeseen disaster struck? Are businesses prepared to weather the storm and rebuild without breaking the bank?
Business interruption insurance is the part of a business policy that will help when businesses are recovering from a fire, flood, or natural disaster.
Business Report: The Power Of A Great Benefits Plan
Provided By
Sherry Finkel Murphy, MS, RICP
The ability to grab and hold on to the best talent is crucial to the long-term success of any business.
One of the most effective ways to keep employees engaged and motivated is by offering them a carefully crafted benefits plan. Along with salary, it’s what employees look at most carefully when deciding whether to join and stay with a firm.
Business Report: How Can Life Insurance Help You
By Breanna L. Lundy
You may not be aware of it, but September is Life Insurance Awareness Month. Of course, you probably recognize, at least in a general sense, the importance of life insurance, but do you know the various ways in which it can help you?
Life insurance can play a sizable role in your ability to achieve some important financial goals, such as these: