Chapter 1
IN THIS LESSON
1. Organizational Overview
Structure (Top-Down):
Dynasty Trust / Family Trust (Irrevocable) – ultimate asset owner; holds 100% of all holding shares and ownership interests.
Holding Company – top-tier management and oversight entity; collects dividends, IP, and licensing fees from the Parent Company and Captive Insurance Company.
Parent Company – serves as the corporate office for all subsidiaries; handles bookkeeping, payroll, and private concierge services. Consolidates internal operations and management functions before reporting upward to the Holding Company.
Operating Companies (Subsidiaries) – income-generating businesses (consulting, e-commerce, services, etc.); operate under the Parent Company’s administrative and financial management.
REIT / Property Entity (if applicable) – real estate investment or asset-holding company; transfers dividends and management income upward to the Parent Company.
Family Office / Asset Management Entity – manages loans, investments, vehicles, and retained capital; funds subsidiaries through secured promissory notes or strategic capitalization.
Captive Insurance Company – collects risk-management premiums and retains tax-deferred reserves; transfers retained earnings or reserves upward to the Holding Company.
Nonprofit / Foundation – receives grants or donations; contracts with Operating Companies for service delivery (e.g., training, housing, consulting); may receive documented contributions from for-profit entities.
2. Financial Flow Summary
This design creates a closed-loop system that preserves liquidity, minimizes taxes, and protects assets.
All inter-company transfers are governed by formal business-to-business contracts for compliance and documentation. This design creates a closed-loop system that preserves liquidity, minimizes taxes, and protects assets.
Standard Flow:
1. Operating Companies → Parent Company
• Pay management, bookkeeping, private concierge, and payroll fees under IRC §162 (deductible).
• The Parent Company acts as the corporate office for shared internal services and administration.
• Consolidates revenue from all subsidiaries for financial reporting and operational oversight.
2. REIT / Property Management Entity → Parent Company
• Transfers property management fees, maintenance income, or dividends upward for consolidation.
• Keeps real estate and facility management separate but under unified control.
3. Family Office / Asset Bank → Parent Company
• Directs funds for payroll, operations, or concierge support when needed.
• May lend or allocate strategic capital to the Parent Company for operational liquidity.
4. Parent Company → Holding Company
• Sends retained profits, management fees, or licensing revenue upward for consolidation.
• Acts as the operational bridge between working entities and the Holding Company.
• Maintains majority ownership of Operating Companies, REIT, Property Management, and Family Office.
5. Captive Insurance Company → Holding Company
• Collects deductible risk-management premiums (up to limits under IRC §831(b)).
• Retains reserves tax-deferred, strengthening internal liquidity.
• Distributes retained earnings or reserves upward when appropriate.
6. Holding Company → Dynasty Trust (Irrevocable)
• Declares qualified dividends to the Trust (owner of all shares).
• Trust records passive dividend income — no self-employment tax.
7. Dynasty Trust → Family Office / Asset Bank
• Allocates strategic capital or issues loans (secured promissory notes, typically 4–6% interest).
• Funds vehicle purchases, investments, or subsidiary capitalization.
8. Family Office / Asset Bank → Subsidiaries / Operating Companies
• Issues operating loans or investments for expansion.
• Receives repayment with interest to grow its balance sheet.
9. Nonprofit / Foundation → Operating Companies
• Contracts with Operating Companies for program delivery (training, housing, consulting, etc.).
• Payments are deductible expenses for the nonprofit and taxable revenue for the Operating Companies.
• May also receive properly documented donations from for-profit entities to fund charitable missions.
✅ Top-Down Recap:
Operating Companies / REIT / Family Office → Parent Company → Holding Company → Dynasty Trust →
Family Office / Asset Bank → Subsidiaries → Nonprofit / Captive / REIT → back into the system.
*Trust records passive dividend income—no self-employment tax.
Voyage To Mastery
Where are you at on your Voyage?
Every Great Empire Begins with a Single Voyage.
This path represents your journey from the spark of an idea to mastering your business step by step, phase by phase. Each stop along the way builds the foundation for the next, guiding you from formation and funding to protection and growth.
Your voyage to mastery isn’t just about launching a business it’s about building something that lasts. Follow each phase, take decisive action, and stay the course.
Success isn’t a destination; it’s the journey you command.
