It can be daunting to decide whether to organize a new venture as a nonprofit, tax-exempt organization or as a for-profit, business entity. Sometime an organization could be organized and operated both in a manner that qualifies for tax-exemption under Internal Revenue Code Section 501 or as a taxable business entity. Toss in a number of recently developed “hybrid” legal entities like the L3C and the social benefit corporation, and it is easy to quickly become misguided and/or confused in the options. Founders should thus heed Stephen Covey’s wisdom and begin with the end in mind.
Start counting—employees, that is. The federal Patient Protection and Affordable Care Act of 2010, which is well known as "ObamaCare," imposes "pay or play" requirements on certain employers. Essentially, they must either provide minimum levels of health insurance coverage or pay monetary penalties for non-coverage. These requirements apply only to employers with at least 50 "full-time equivalent" employees. Consequently, many smaller employers need not be concerned about compliance with ObamaCare.
Must a nonprofit board always take action through a directors’ meeting? May the board circulate an email instead, asking for responsive votes from the directors? What if some directors attend a board meeting and vote there, while other directors email their vote on the same matter? These are common questions asked by nonprofit directors. Thankfully, the answers are clear.