An estimated 25 percent of businesses do not reopen after a major disaster, according to the Institute for Business and Home Safety. We all remember those horrific images from Katrina and its effect on the Gulf States and now they are being hit hard again with this oil spill. Natural and man made disasters not only effect individuals; they take a high toll on businesses as well. Getting back to business after a disaster may depend on your preparedness and planning done today. Here are some simple steps offered to help you create a disaster plan for your business.

FEMA and www.business.gov are two groups who will offer helpful support with regard to disaster preparedness. Basically, they each assert the importance of having a plan which stresses the following elements:

1.)    Be Informed – know what kinds of emergencies will affect your company

2.)    Continuity Planning – careful assessment of how your company functions, both internally and externally.

3.)    Employee Emergency Training – your employees are your most important asset – applying internal training and structure before an event will ensure proper reaction and better results.

4.)    Emergency Supplies – make sure you have the basics of survival covered – water, food, clean air and warmth.

5.)    Evacuation Scenarios and Plans – deciding when to stay and leave can be the most important decision you can make in light of a pending disaster – preparing both an evacuation plan as well as an internal shelter plan will prove valuable in times of crisis.

6.)    Fire Safety – Always remember that fire is the number one cause of most business disasters – take the obvious necessary steps to prevent such an event – smoke detectors, sprinkler systems, fire extinguishers and a plan of escape are all crucial, and usually prescribed by local laws.

7.)    Prepare for Medical Emergencies – employee first aid and CPR training, keeping first aid supplies in stock and accessible, gathering information on existing employees medical issues and maintaining proper and accurate emergency contact information are all stressed. Installing a defibrillator in your company is also a good idea.

8.)    Pandemics – get as much information as possible with regard to signs and symptoms from local health management officials and recommended prevention and control, adopt policies designed to isolate sick employees form the group – stay home directives, practice overall good health practices and programs supporting good hygiene – such as hand washing

9.)    Protect your information – using techniques such as back up info. storage structure and off site information storage will help greatly reduce the risk of losing valuable data.

In addition, having a risk assessment audit done on your business is one way to plug the holes before they become giant leaks. The important thing is to follow the old Boy Scout Motto: “Be Prepared”!

When referring to shares of stock in a Delaware company, par value is the bottom or lowest limit set to the value of a share of stock in a corporation. A share may not be bought, sold or traded for less than the par value. Simply stated, if the par value of a share is $1.00, then it cannot be issued to an investor for less than a dollar, paid for in funds or services. Par value sets only your bottom limit, but the Board of Directors may set the price of stock at any amount above par. Let’s say your par value is $.01 but the Board of Directors sells stock to an investor for $5.00 per share. This is perfectly legal. The board may ask any price and the investor pays what the market will bear. But keep in mind that you are selling some percentage of your corporation with each share you issue or sell.

If you’ve shopped around for an online incorporator, you might have noticed that they will often suggest a par value of zero. Why do they do this? Realizing that many people who are just starting their incorporations are small start-ups companies, incorporators suggest low to no par value so that the owners or initial shareholders will not need to make substantial investments into the corporations in order to own their companies at the time of organization. In the case of “no par” shares, they may be issued to the shareholders without the exchange of funds, goods or services. Having no par value will not restrict you in selling your shares to investors at the price determined by the Board, and accepted by the investor,  just like shares that do have a par value. Ultimately a share is worth what an investor is willing to pay for it.

Even though No Par stock sounds great, it is not for everyone. In many cases, corporations will want to assign a par value so that an investment (whether it be funds or services) is required in order to own a share in the company. This will help a corporation generate investment revenue for growth and/or help to recoup startup costs. Also, some states may have limitations to the number of shares that may be offered at no par, or charge additional filing fees and/or taxes based on the number of shares authorized at zero par. For instance, Delaware’s Division of Corporations will allow up to 1,500 shares of no par stock before you will begin to experience additional filing fees. In addition, franchise taxes for large amounts of no par stock (in excess of 5000 authorized shares) can prove to be very expensive.

If you have concerns about the impact of the number of authorized shares or the impact of the par value on your filing fees or franchise tax in Delaware, please feel free to give us a call or send us an email.

Question: What Is an ITIN?

Answer: The ITIN number or “Individual Taxpayer Identification Number” is similar to that of the Social Security number. The ITIN is for individuals that cannot acquire the SSN but have tax filing requirements with the IRS. The ITIN is 9 digits in length just like a SSN, but it will always start with a 9. The number was created 13 years ago to assist individuals without a SSN to comply with Federal tax law. The thought process is if income is earned here, then filings need to be made with the IRS, whether you are here legally or not. Not just anyone will receive an ITIN number, the IRS stipulates that the individual requires a filing of a federal return in order for it to be issued. Possession of an ITIN does not indicate permission to work in the US or obtain benefits from the Social Security Administration, it is simply a number to identify an individual to the US tax system.

I was surprised to learn that the IRS is not allowed, by Federal Law, to share any of this information with any of the other US Agencies. This was enacted to encourage filings with the IRS without the fear of retribution, such as deportation. The goal of the legislation was to allow illegal immigrants to pay their fair share of taxes. More than 1.5 million applications for the ITIN were processed in 2008. A recent study by the Treasury Inspector General for Tax Administration took a sampling of 510 ITIN applications and found that 78% of these contained errors, but they were processed anyway. In addition, the government also admitted that more than 55,000 ITIN’s were used multiple times on different returns within a year, with refunds totaling over $202 Million!

If you need an ITIN don’t let the lengthy application deter you from proceeding, as the statistics above show, even if you mess up the application they will still issue the number…..

If you would like information on how to obtain the ITIN number visit http://www.irs.gov/individuals/article/0,,id=96287,00.html