Since 1986, the Age Discrimination in Employment Act (ADEA) has eliminated mandatory retirement for most types of employees.
Most states also prohibit forced retirement. However, there are two types of mandated retirement that are allowed: (1) where you are retiring high-level executives, and (2) where there are bona fide occupational considerations. Continue reading “Can You Force Retirement?”
If you own or represent an Illinois corporation, you may have received correspondence about your annual minutes that looks like it is from a government agency. In all likelihood, the form is not from a government agency, but rather a private business that purports to prepare annual minutes. The correspondence that we received includes a form that cites several provisions of the Illinois Business Corporations Act and provides blanks to disclose the names of the corporation’s shareholders, directors, and officers. The form requests payment of a $125 fee and implies that it must be submitted by a deadline. The form creates the impression that Illinois law requires corporations to file their annual minutes with a state agency and pay a fee, similar to how corporations file annual reports with the Illinois Secretary of State. This form could deceive corporate representatives and cause them to complete it under the mistaken belief that it is required by the Illinois Secretary of State’s Office. By completing it, you would be supplying names and addresses of corporate officers to a private party. Who knows what they will do with that information. Continue reading “Carefully Review Correspondence about Annual Minutes”
Where Not to Look for Short-Term Cash Flow Needs
Dipping into employee taxes may lead to personal responsibility for directors, officers
There is an urban legend in the Illinois nonprofit world about a Chicago-based nonprofit organization that was notified by the state department of revenue of a withholding tax delinquency. The executive director and board chair drove to the capitol city of Springfield to look into the matter. However, the interview did not go as they had expected. As the story goes, the state impounded the car they came in and they were forced to return home by train. Continue reading “Pay Employee Taxes!!”
Liability exposure is a common concern of both for-profit and tax-exempt entities. To minimize liability risk, parent entities create subsidiaries to engage in activities that would otherwise expose the parent to liability. In the tax-exempt context a parent may incorporate a subsidiary to operate a specific charitable program, such as a residential facility for the disabled, a thrift store, or a school. This structure is advantageous to the parent because only the assets of the subsidiary would be at risk for the liabilities of the charitable program. Tax-exempt entities with limited resources may be dissuaded from creating subsidiaries due to the misconception that the parent must operate entirely independent of the subsidiary. While certain functions must be separate, the law allows considerable overlap without compromising the liability shield provided by separate corporate personalities. Continue reading “Parent-Subsidiary Veil-Piercing”
Operators of resale shops should be aware of the Consumer Product Safety Improvement Act (CPSIA). The CPSIA, enacted in 2008, makes it illegal to sell any recalled product or any children’s product that contains lead or phthalates exceeding certain limits. Under CPSIA, a children’s product includes any consumer product designed or intended primarily for children aged 12 years of age or younger. Numerous products could fall within the scope of CPSIA, such as toys, furniture, clothing, jewelry, and books. Provisions of CPSIA lower allowable levels of lead and phthalates in children’s products in 2009 and 2010. In August 2011, the total allowable lead content of children’s products is scheduled to become even more stringent. This standard is subject to change every five years based upon available technology. Continue reading “Consumer Product Safety Improvement Act and Resale Shops”
It is a common misconception that online sales are not subject to state sales taxes. However, states may impose sales taxes on any sale, online or traditional, if the seller has nexus with the state. Nexus can be a difficult legal doctrine to apply, so sellers should obtain a legal opinion to determine if they are subject to a state’s sales taxes. Nexus usually entails a physical presence in the state, which can be as insignificant as sending independent sales representatives to the state. Continue reading “Sales Tax Liability and Voluntary Disclosures”
The L3C, or low-profit limited liability company, is a new legal entity that could dramatically enhance funding sources for charitable and educational projects. The L3C could be useful to anyone who wants to further charitable or educational objectives. The L3C is a substantial development because it is extremely rare that the legal system creates new types of legal entities. Conducting business with a separate legal entity is a concept that dates to the Roman Empire. Over the past few centuries, however, legal entities have slowly adapted in response to the needs of the business community. The creation of the limited liability company in the 1970s and 1980s is one of the more recent examples. Continue reading “The L3C: An Innovation in Charitable Funding?”
Alliance for Children and Families, July 01, 2005
For a 2015 update, see this link.
Age discrimination made the news in late March 2005 when the U.S. Supreme Court ruled that an
employer illegally discriminated against older workers even though there was no intention to do so. Continue reading “Age Discrimination: Steering Clear of Disparate Impact”