Overview The Small Business Reorganization Act (“SBRA”) is a new bankruptcy law, effective February 2020, aimed at opening new protocols to help small business successfully reorganize under federal bankruptcy. Why is this important? Prior to SBRA, struggling businesses had two options in bankruptcy, Chapter 7 and Chapter 11. In short, Chapter 7 is liquidation, and
Many are confused by nonprofit and tax-exempt corporations. They can be similar to some extent, but they have many differences in tax obligations. If you’re thinking of starting a social enterprise, it’s essential to understand what “not-for-profit” means. Many believe that nonprofit organizations do not pay taxes. This isn’t really the case. Nonprofits like churches and
Filing requirements for tax-exempt organizations can be a maze of bureaucracy. Though many tax-filing requirements can be similar for the different types of tax-exempt organizations, there are key distinctions 501(c) organizations should be aware of. Fortunately there are tax preparation services that can help in this matter. Though before we go any further, it is
The Relationship Test In our last blog post we discussed Supporting Organizations and the first three tests for how to determine if a 501(c)(3) public charity is a supporting organization. In the second part of this two part series, we’ll discuss the fourth and final test of supporting organizations: the Relationship Test. Depending on the
Most 501(c)(3) public charities are characterized as such because they receive most of their funding from donations from the general public, government grants, or from other 501(c)(3) public charities. However, some public charities are characterized as such because they support other public charities. These organizations are appropriately called supporting organizations. Unlike other public charities who
Despite the IRS’s best efforts to inform the public, many tax-exempt organizations fail to file their annual informational return (examples here). While failing to file for a single year may trigger late fee penalties, the real threat is that if an organization fails to file their 990 for three consecutive tax years, they AUTOMATICALLY lose
During hard economic times, subleasing space can be a smart way for businesses to increase their income. By renting out unused portions of their leased space to subtenants, businesses can offset some of their rent and other expenses. Subleasing can also help businesses generate revenue without having to take on additional financial obligations, such as
How long to retain business records, emails, and other documents is a question that many businesses struggle with. After all, when an employee leaves, why not delete their email account and just hold onto official files? While tempting, employee emails are company records. And to make it more perplexing, document retention requirements vary depending on
In recent years the discourse on nonprofits and the function of nonprofit organizations in society has included a new term, a term that, depending on who you ask, may cause interest, confusion, or derision. The term, I am referring to is the “nonprofit industrial complex”. In 2004, the term was coined by INCITE!, a national
Dissolution, the process of officially closing down a business, can be a complex process given the assets and liabilities of a corporation. Once a governing body of an organization decides on a dissolution, having a plan for dissolution from start to finish can save on time and costs. That being the case, this blog is