IU & business ownership in IU - Individual Unemployability Forum

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IU & business ownership

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AusamMom

IU & business ownership

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Posts: 4

Jun 9 10 10:02 AM

I have IU, but want to start an SDVOSB with my husband. Do I have to be the owner and he can be the manager/controller, or, as my spouse, can he be the owner and manager/controller? Or do I need to post this elsewhere...sorry, I'm a newbie!!

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Vet10

Welcome to VBN

#1

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Posts: 1906

Jun 9 10 10:27 AM

Good people and great info here. You have an interesting question. Frankly, if you are drawing IU then you are unable to work. That would mean running a business as well. Anything you do in that regard jeopardizes your IU. But then how does a disabled vet drawing IU partake of this program. Is there a way to thread the needle? My guess is no.

If it was me I would contact the VA department that runs the SDVOSB (in writing) and see how you can set this up under your husband if that is possible. If you can run it, then drop your IU. You can't have your cake and eat it to. I wish you the best of luck.

Vet10
100% IU - Permanent and Total

"You win some, lose some, some get rained out, but you have to dress for them all."

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wrenchturner

#2

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Posts: 1735

Jun 9 10 10:32 AM

Merely 'owning' a business doesn't mean you work nor make money.

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AusamMom

#3

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Posts: 4

Jun 9 10 10:32 AM

I can't run it, but if I'm reading everything correctly, my husband can be the manager/controller. I just need to see if I have to be the owner (on paper, I'll not be doing any of the day to day operational work, he will) or if he can also be the owner as my spouse...CONFUSING!! Nothing is spelled out very well...SHOCKING, I know!! LOL

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RustyShackleford

#4

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Posts: 2598

Jun 9 10 10:43 AM

If your husband is a veteran he can be owner, but by definition you are asking about....Service Disabled Veteran Owned Small Business...and it sounds like you would have to be an owner of the business.

The programs are designed to help VOSB's obtain government contracts.

Successfully obtaining work by contracting with the government would seem to be the antithesis of being "unemployable"......from a monetary standpoint at the VERY LEAST, never mind the activity itself.

Here are a few VOSB link sources for you to research:

SSA
Army
GSA
IRS
SBA
USDOT

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vetforus

#5

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Posts: 3060

Jun 9 10 11:15 AM

If you and your husband start this business and you decide to be Corporation you will have to draw a salary which would mean a W-2. If you never incorporate and did some part time work you would get a 1099 Misc form. If you incorporate and are a co-owner no matter the salary with the W-2 you'll have to pay Social Security taxes. If the Social Security taxes are very small due the a small salary depending on how long you have the business could affect your Social Security at retirement time. VA does an income verification match with Social Security for Veterans who are IU. As an "S" Corporation your husband can be the sole owner, you would not have to be on the ownership documentation. So the bottom line is if your husband starts the business as an LLC or S Corp you do not have to be on the forms.

You paid a price, you deserve to be compensated. Thank you for your Service.

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witchdoctor

#6

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Posts: 11395

Jun 9 10 11:42 AM

DEFINITION OF SDVOSB:

Service Disabled Veteran-Owned Business: Not less than 51% of which is owned by one or more service-disabled veterans,
or in the case of any publicly owned business, not less than 51% of the stock of which is owned by one or more
service-disabled veterans;

and the management and daily business operations of which are controlled by one or more
service-disabled veterans, or in the case of a veteran with a permanent and severe disability,
a spouse or permanent caregiver of such veteran.

As long as you are P&T, your spouse could take over the active management and daily operations.

The 100 % P&T Service Connected Disabled Vet would have to be listed as the 51% owner to maintain the
SDVOSB rating while the concern was managed and operated by the spouse.

Member-at-large:
Disturbed Veterans of America.

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AusamMom

#7

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Posts: 4

Jun 9 10 11:58 AM

Do you think him having legal guardianship over me would make any difference?

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Airborne1

Careful with SDVOSB status & IU

#8

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Posts: 114

Jun 9 10 12:16 PM

I have been the owner of a SDVOSB for the past 11 years. I gave up my IU in order to control the business & operate it on a daily basis. What Witchdoctor has posted above is correct, however, the VA tends to freak out when they see you are drawing IU & you also own a business. I was forced to give up my IU or my business - one or the other when I sought federal contracts.

It just didn't seem right to accecpt the IU when I was actually working. I actually had a contracting officer ask me how I could own the business & draw IU.

I am 70% and I receive my compensation for it. I also own & operate my business full time. I can tell you that the federal contracts are VERY lucrative as a SDVOSB. There are many resources out there as well. (posting a couple below for you).

Just so you know, you will need to consider the risk / reward options before starting out. You may want to have the spouse start & run the business & when you are large enough to take on federal contracts, then look at the SDVOSB status & review your IU status at that time.

From experience, I can tell you that it will take the better part of 2 years to succesfully navigate the SDVOSB system & successfully win your first contract. Mine took about 15 months but the first contract was a $1.7 million one. (just make sure you have the cash or financing to carry the terms with the government - they were over 3 months late in paying us on teh first contract, which hurts cas flow)

I made more off of the one contract than I would off of IU for the rest of my life (I am 35). We now do about $3 million in sales per year to the government & another $1 - $1.5 million to prime contractors looking to fulfill their goals.

Honestly, I feel better actually working. My SC disabilities cost me the use of an arm and some other issues, but I can still run a business using voice software, etc.

You can private mail me and I would be happy to call you or speak to you about it more. I will even help you with the process (no charge) to help you avoid the pitfalls I encountered along the way.

In the meantime, check out:
www.navoba.com (National veteran owned business association)
www.veteranownedbusiness.com
www.linkedin.com (search for SDVOSB group)
www.ccr.gov (central contractor registration - required to work with government)
www.dnb.com (dun & bradstreet - required to have a DUNS #)
www.vetbiz.gov (program by the VA for SDVOSB's & VOB's - make sure you register when ready & get verified by the CVE team)

Again, private mail me & I would be happy to give you some more info on the program and give you some insight into my personal story with it.

Edited 1 time by Airborne1 Jun 9 10 12:20 PM.

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witchdoctor

#9

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Posts: 11395

Jun 9 10 12:20 PM

Any difference in what?

If your disabilities are permanent and severe, he can run the business day to day.

You must be the owner.

Member-at-large:
Disturbed Veterans of America.

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Airborne1

#10

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Posts: 114

Jun 9 10 12:26 PM

AusamMom - another thought -

You may want to consult with an attorney that specializes in this field. There are also tax implications with regards to filing status. It depends on what state you are in as well.

For example, if my company is an LLC, I can pass through profit / loss on my personal taxes.

However, in order to be the "owner" of the business, the profits go to me, not my wife, (even if she controlled the business) because I am the owner. Inorder to be a verified SDVOSB, I have to be 51% owner. Profits have to go to me at 51% and my spouse at 49% in this case.

Its a double edged sword & there are a lot of legalities (and more on the way) with the SDVOSB program. There is a lot of fraud in the SDVOSB program right now where companies are "renting" disabled vets in order to win contracts.

Now, say the VA asks you to fill out an annual income statement......... you have to declare your 51% of the income & it could affect your IU (and social security if you get it).

Personally, I made the decison to not try to circumvent the system (and risk prison for fraud) and just gave up the IU to run the business. IU was nice for the 2 years I had it, but I chose to try to work. The monthly IU check got us by, but provided no future for my family.

Your circumstance is going to be different depending on age, etc, but I would advise you to seek counsel before progressing.

Good luck!

Edited 1 time by Airborne1 Jun 9 10 12:30 PM.

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chicagobob25726

IU AND BUSINESS

#11

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Posts: 3174

Jun 9 10 1:27 PM

Can always give up I.U and all that $$$$..

"The NAVY CHIEF IS ALWAYS RIGHT"

CPO "INITIATED AND PROUD"
100% I.U/P&T/Combined 80%
70% G.A.D/MAJOR DEPRESSION
30% Headaches
10% Back
10% Knee

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bc199th

#12

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Posts: 985

Jun 9 10 2:10 PM

Airborne1 wrote:
I have been the owner of a SDVOSB for the past 11 years. I gave up my IU in order to control the business & operate it on a daily basis. What Witchdoctor has posted above is correct, however, the VA tends to freak out when they see you are drawing IU & you also own a business. I was forced to give up my IU or my business - one or the other when I sought federal contracts.

It just didn't seem right to accecpt the IU when I was actually working. I actually had a contracting officer ask me how I could own the business & draw IU.

I am 70% and I receive my compensation for it. I also own & operate my business full time. I can tell you that the federal contracts are VERY lucrative as a SDVOSB. There are many resources out there as well. (posting a couple below for you).

Just so you know, you will need to consider the risk / reward options before starting out. You may want to have the spouse start & run the business & when you are large enough to take on federal contracts, then look at the SDVOSB status & review your IU status at that time.

From experience, I can tell you that it will take the better part of 2 years to succesfully navigate the SDVOSB system & successfully win your first contract. Mine took about 15 months but the first contract was a $1.7 million one. (just make sure you have the cash or financing to carry the terms with the government - they were over 3 months late in paying us on teh first contract, which hurts cas flow)

I made more off of the one contract than I would off of IU for the rest of my life (I am 35). We now do about $3 million in sales per year to the government & another $1 - $1.5 million to prime contractors looking to fulfill their goals.

Honestly, I feel better actually working. My SC disabilities cost me the use of an arm and some other issues, but I can still run a business using voice software, etc.

You can private mail me and I would be happy to call you or speak to you about it more. I will even help you with the process (no charge) to help you avoid the pitfalls I encountered along the way.

In the meantime, check out:
www.navoba.com (National veteran owned business association)
www.veteranownedbusiness.com
www.linkedin.com (search for SDVOSB group)
www.ccr.gov (central contractor registration - required to work with government)
www.dnb.com (dun & bradstreet - required to have a DUNS #)
www.vetbiz.gov (program by the VA for SDVOSB's & VOB's - make sure you register when ready & get verified by the CVE team)

Again, private mail me & I would be happy to give you some more info on the program and give you some insight into my personal story with it.

Airborne1, Your story is very uplifting. You should be very proud of what you have accomplished. Good job!

Bo
11B40
Vietnam '69-'70
90% SC
100% IU, P&T
SSDI

"The Americans will always do the right thing...after they've exhausted all alternatives"---Winston Churchill

"T

"Tl

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Airborne1

#13

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Posts: 114

Jun 9 10 2:22 PM

BC199th - thank you & thank you for your service in Vietnam. My dad was light infantry in Vietnam from 70 - 71. He is also 80% and 100% with IU.

You guys in Vietnam had it a hell of a lot worse than I ever did. Combat is combat but the conditions you had truly made you guys warriors. Nothing but respect for you guys from me.

Take care.

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Airborne1

I tried

#14

[-]

Posts: 114

Jun 9 10 2:36 PM

chicagobob25726 wrote:
Can always give up I.U and all that $$$$..

Chicagobob25726...... I tried but my wife said no to giving up the money from the business. Being the good soldier I am, do what she says. The IU was a no brainer to give up when I considered the risk / reward option. It took a while to get there, but I started the business with less than $800 and a telephone with unlimited long distance.

One of the best decisions I have ever made....

Good luck!

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Vet10

#15

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Posts: 1906

Jun 10 10 9:49 AM

Airborne 1,

Thanks for your story! So uplifting to see integrity vs scam the system and outright lying that you read in the newspapers these days. I truly wish you the best of luck!

Vet10
100% IU - Permanent and Total

"You win some, lose some, some get rained out, but you have to dress for them all."

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mr G777

#16

[-]

Posts: 5779

Jun 10 10 9:53 AM

Airborne1 wrote:
BC199th - thank you & thank you for your service in Vietnam. My dad was light infantry in Vietnam from 70 - 71. He is also 80% and 100% with IU.

You guys in Vietnam had it a hell of a lot worse than I ever did. Combat is combat but the conditions you had truly made you guys warriors. Nothing but respect for you guys from me.

Take care.

thanx for your family's service to our country !!!

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ex submariner

#17

[-]

Posts: 239

Jun 11 10 6:19 PM

witchdoctor wrote:
DEFINITION OF SDVOSB:

Service Disabled Veteran-Owned Business: Not less than 51% of which is owned by one or more service-disabled veterans,
or in the case of any publicly owned business, not less than 51% of the stock of which is owned by one or more
service-disabled veterans;

and the management and daily business operations of which are controlled by one or more
service-disabled veterans, or in the case of a veteran with a permanent and severe disability,
a spouse or permanent caregiver of such veteran.

As long as you are P&T, your spouse could take over the active management and daily operations.

The 100 % P&T Service Connected Disabled Vet would have to be listed as the 51% owner to maintain the
SDVOSB rating while the concern was managed and operated by the spouse.

Would this also be true with a child of a SCD veteran? Thanks smile

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ex submariner

dissabled vet and small buis. would this work with adult child versus spouce

#18

[-]

Posts: 239

Jun 11 10 7:00 PM

Currently on IU and SSDI. I feel fairly certain my disability will prevent me from returning to work. I seen this thread about SCDV small buiseness. I'm wondering if that would be the same with a adult child. Since becoming dissabled I have lost a spouce. I have an adult daughter who I would consider starting a buiseness with. I'm in no condition to run or operate the buiseness, but could I obtain this buisness with an adult child ? How would that affect IU and SSDI? I'm reading that I would have to own and recieve part of the profit. I'm not intrested in profit from the buis. but would like to set buis up for her to run and operate if that is possible. Input please thanks

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AusamMom

#19

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Posts: 4

Jun 15 10 9:14 PM

Thanks for all the help, it has given us a lot to think about...

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vmattphd

IU and SDVOSB

#20

[-]

Posts: 2

Mar 4 12 7:35 PM

Airborne1,

I too have a question concerning business ownership and SDVOSB. If I give up my IU, do I still maintain my original disability rating? I am desperate to return to work in any capacity and I was hoping that I could email you some of my questions as well. How would I contact you via private email? Thank you in advance.

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