In this issue
With a ball-point pen and steel nerves, a bookkeeper looted a family owned textile manufacturer. The scam took advantage of trusting employers who saw no reason to update their accounting system.
Here's how the deception worked. To pay vendors, the bookkeeper prepared checks for the company president's signature. As he had been doing for decades, the president and patriarch simply signed what was placed in front of him. He never examined invoices or supporting documents.
The resourceful business owner in today's economy is forced to be more receptive to the various vehicles, both simple and complex, that offer significant tax saving opportunities. Passing the business to the next generation is an increasingly difficult task requiring considerable foresight and planning. A top estate tax bracket of 60 percent (including the 5 percent surtax on estates between $10 million and $21.4 million) makes it imperative to consider gifts to heirs to reduce the overall taxable estate.
The high mortality rate of small businesses in America is well known, and in recent times countless family companies have been forced to the brink by stagnant markets, increased competition, and a credit crunch.
Many family firms, however, have responded to crises in positive ways, regaining the entrepreneurial fire of their founders to beat oversees competitors, improve financial discipline, outfox national chains and catalogers, reduce expenditures, and raise quality.
In the annals of business families, there are a few classic examples of father-to-son letters that contain wise advice on preparing for careers in the family company. There are also letters that probably shouldn't have been written, that only incite the young to rebellion.