TEXAS MEMBER-MANAGED LLC
By: Allen T May, C.E.O. of Westwood Associates, LLC.
If you don't specify how you want your LLC managed in your formation documents, Texas will treat your company by default as member-managed. As the owner and sole member of the LLC, this means you are also the manager - in the full legal sense of the word. As sole owner/member/manager of the LLC, you do have the option to delegate certain managerial authority to other people, such as authorizing someone else to write checks for the business or handle the company's accounting. This can be done in your operating agreement or by some other means such as a consent resolution or power of attorney.
Delegating certain management responsibilities to another person will not make the other person a manager. That person will only have the specified delegated authority and you - the sole owner - will remain the manager with the general overall authority under Texas state law to run the business. In addition, because you are also the owner, you will not be subject to the limitations on authority that otherwise apply to managers under Texas state law.
With a member-managed LLC, options for transfer of full management authority upon the death or incapacitation of the owner/manager include putting a section in the operating agreement, using a separate written resolution, or using other legal documents to transfer control. You may want to consider looking into those options to help ensure your business keeps operating in case something happens to you.
As with manager-managed LLCs, there also may be options under trust or estate planning laws. Keep in mind that because a member-managed LLC does not have a role of manager separate from the owner defined by statute, it may be more complicated or take more time to transfer management authority to another person.
Regarding this matter, we strongly suggest that you contact your licensed Texas attorney for guidance on what works best for your individual situation. For additional management consulting matters regarding your Texas LLC, please feel free to reach out to me via email at: allentmay@gmail.com
Sunday, May 20, 2018
Thursday, May 17, 2018
NONPROFITS CAN LOSE TAX-EXEMPT STATUS
NONPROFITS CAN LOSE TAX-EXEMPT STATUS
By: Allen T. May, C.E.O. of Westwood Associates, LLC
Nonprofits can lose federal tax-exempt status by not filing IRS Form 990 or IRS Form 990-EZ for a three year period. Small tax-exempt nonprofit organizations whose annual gross receipts are normally $25,000 or less ($50,000 for tax years ending on or after December 31, 2012) may be required to electronically submit IRS Form 990-N, also known as the e-Postcard, unless they choose to file a complete IRS Form 990 or IRS Form 990-EZ.
If you do not file your e-Postcard on time, the IRS will send you a reminder notice. However, an organization that fails to file required e-Postcards (or information returns 0 IRS Forms 990 or 990-EZ) for three consecutive years will automatically lose its tax-exempt status.
The revocation of the nonprofit organization's tax-exempt status will not take place until the filing due date of the third year. The e-Postcard is due every year by the 15th of the 5th month after the close of your tax year. For example, if your tax year ended on December 31st, the e-Postcard is due on May 15th of the following year. If the due date falls on a Saturday, Sunday or federal holiday, the due date is the next business day. You cannot file the e-Postcard until after your tax year ends.
Protecting your organization's tax-exempt status should be one of your highest priorities.
If you feel your tax-exempt status may be in jeopardy, we urge you to contact your tax professional for assistance.
By: Allen T. May, C.E.O. of Westwood Associates, LLC
Nonprofits can lose federal tax-exempt status by not filing IRS Form 990 or IRS Form 990-EZ for a three year period. Small tax-exempt nonprofit organizations whose annual gross receipts are normally $25,000 or less ($50,000 for tax years ending on or after December 31, 2012) may be required to electronically submit IRS Form 990-N, also known as the e-Postcard, unless they choose to file a complete IRS Form 990 or IRS Form 990-EZ.
If you do not file your e-Postcard on time, the IRS will send you a reminder notice. However, an organization that fails to file required e-Postcards (or information returns 0 IRS Forms 990 or 990-EZ) for three consecutive years will automatically lose its tax-exempt status.
The revocation of the nonprofit organization's tax-exempt status will not take place until the filing due date of the third year. The e-Postcard is due every year by the 15th of the 5th month after the close of your tax year. For example, if your tax year ended on December 31st, the e-Postcard is due on May 15th of the following year. If the due date falls on a Saturday, Sunday or federal holiday, the due date is the next business day. You cannot file the e-Postcard until after your tax year ends.
Protecting your organization's tax-exempt status should be one of your highest priorities.
If you feel your tax-exempt status may be in jeopardy, we urge you to contact your tax professional for assistance.
BENEFITS OF AN EMPLOYMENT AGREEMENT
BENEFITS OF AN EMPLOYMENT AGREEMENT
By: Allen T. May, C.E.O. Westwood Associates, LLC.
Every business needs legally binding employment agreements. They need contracts for different types of employees including full-time, part-time, and casual. Contracts are also necessary for any independent contractors. A good employment contract will spell out what exactly you expect the employee to do - the parameters of the job duties. In addition, the contract will spell out what your employee can expect from you. However, there are other terms that you can include in an employment contract, such as: reasons and grounds for termination, covenants not to compete, non-disclosure agreements, methods for resolving disputes, and anything else you deem important.
A good employment agreement should also define the kind of behavior you expect employees and even contractors to engage in. If employees violate this and engage in behaviors that damage the business then you'll be within your legal rights to terminate their employment. It's a safeguard every small business needs. A good employment agreement will also serve to protect your business if any lawsuits arise. If an employee or independent contractor signs a contract then a business owner can limit a lot of responsibility and damage he or she could face in a lawsuit.
Please feel free to contact us for additional information on employment agreements.
By: Allen T. May, C.E.O. Westwood Associates, LLC.
Every business needs legally binding employment agreements. They need contracts for different types of employees including full-time, part-time, and casual. Contracts are also necessary for any independent contractors. A good employment contract will spell out what exactly you expect the employee to do - the parameters of the job duties. In addition, the contract will spell out what your employee can expect from you. However, there are other terms that you can include in an employment contract, such as: reasons and grounds for termination, covenants not to compete, non-disclosure agreements, methods for resolving disputes, and anything else you deem important.
A good employment agreement should also define the kind of behavior you expect employees and even contractors to engage in. If employees violate this and engage in behaviors that damage the business then you'll be within your legal rights to terminate their employment. It's a safeguard every small business needs. A good employment agreement will also serve to protect your business if any lawsuits arise. If an employee or independent contractor signs a contract then a business owner can limit a lot of responsibility and damage he or she could face in a lawsuit.
Please feel free to contact us for additional information on employment agreements.
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