Articles posted by rosten
Improper Influence in Academic Research: False Claims Act
There have been a rash of news stories on various constraints under which U.S. universities and other research institutions must labor to cooperate with foreign institutions and academics. This is a hot issue because the life blood of many U.S. institutions is cooperation with foreign institutions. The U.S. government has been keenly concerned about this cooperation because of the specter of espionage and intellectual property theft. Institutions of higher learning have countered that overzealous government oversight impedes academic freedom. Given this heightened scrutiny, researchers, colleges and universities need to understand the constraints that are imposed in cooperating with foreign institutions and researchers. There are three major laws today that are in the toolkit of prosecutors who are ...
Read more
Nonprofit Law Developments in Excess Benefit Transactions
Taxes for excess benefit transactions are to deter insiders otherwise known as disqualified persons from using a nonprofit for unreasonable compensation. Recent tax court cases underscore that apart from those named in the law as disqualified persons who were obvious targets—such as directors and certain officers, members of their families, and certain affiliated entities—there may be others who qualify as “disqualified persons.” The question whether an individual is a disqualified person generally “depends upon all relevant facts and circumstances.” The same guidance that goes for nonprofits goes for every legal entity: keep the entity separate. It may be obvious, but you should not use the nonprofit’s funds to buy groceries for the officers or directors or other insiders. You shoul...
Read more
Nonprofit Law Developments in Private Inurement
This article discusses recent developments in nonprofit law in private inurement and private benefits. Private inurement issues typically arise in connection with an IRS proceeding seeking to revoke the tax-exempt status of the organization. The IRS will not tolerate even a little private inurement. In short, insiders may not unjustly enrich themselves at the organization’s expense. The other side of the tax-exempt requirement is in the purpose of the organization. Under the private benefit doctrine, an organization is not operated for an exempt purpose unless it serves a public rather than private interest. The IRS recognizes that private benefits to third parties may incidentally arise from the nonprofit’s activities consistent with its proper purpose. Any transaction will result in some benef...
Read more
Employers Stop! Non-Compete Agreements Prohibited
Employers have become increasingly emboldened to stick it to their employees. Employees with little negotiating leverage or without legal counsel have been saddled with some egregious restrictions. Courts over the years have thrown out the most unreasonable restrictions, creating various tests whether to enforce the agreement. But the employee would need the resources to fight back in court. The District of Columbia has recently banned non-compete agreements, which is the trend throughout the country. If you have employees who reside or work in states that have banned non-competes, then you have precious few alternatives except to eliminate non-competes from your employment agreements with those protected employees. In the District of Columbia, that means eliminating non-compete provisions not only ...
Read more
Women Owned Small Businesses: Certification Required
Many small businesses are government contractors. They seek the services of a small business attorney to navigate the difficult landscape of government contracting. One significant lever to allow these small businesses to compete in the government contracting arena is to qualify for one of the contracting assistance programs, such as women owned small business program, administered through the Small Business Administration. There are several advantages if your small business qualifies for one of these certifications, including set asides and sole source contracts. A WOSB is also attractive to a government agency or prime contractor trying to meet its targets. Previously, women owned small businesses were able to self-certify, but as of last year, there are new restrictions on self-certification. Thi...
Read more
Multi-Member LLCs: New Partnership Audit Rules
You will remember that difficult discussion with your small business attorney about how you wanted your limited liability company to be treated for purposes of taxation. If you do nothing, then your multi-member LLC is taxed as a partnership. And in this article, when we refer to a "partner" or a "partnership," we are generally referring to a member in a LLC that is taxed as a partnership. If you want to be taxed as a corporation, you need to file an election. This article highlights the new audit rules and whether you may want to consider making changes to your multi-member LLC....
Read more
Small Businesses Required to Disclose Ownership: Corporate Transparency Act
Some owners of small businesses want to keep their ownership anonymous for various reasons. That just got a lot harder. The trend in many states is to require disclosure. Just last year, the District of Columbia joined other states in enacting legislation requiring the disclosure of beneficial ownership. Other states like Delaware have resisted the change. Now the federal government has entered the fray with the enactment of the Corporate Transparency Act (CTA). If you are a small business or if you are a small business lawyer assisting a small business, you definitely want to familiarize yourself with the CTA. Under the CTA, small business will have to submit beneficial ownership information to the Department of the Treasury’s Financial Crime Enforcement Network. The information will not be avail...
Read moreBCR Monthly Webinars | Ежемесячные семинары в Zoom
Мы спонсируем серию ежемесячных юридических вебинаров на английском языке с синхронным переводом на русский язык. Мы выбрали темы, которые могут заинтересовать иностранных юристов, государственных чиновников, крупные корпорации, малые и новые предприятия, а также отдельных лиц, которые могут иметь деловые связи с Соединенными Штатами....
Read more
Funding for Startups: Seed Financing
Most entrepreneurs are constantly looking for money to support their small businesses. Startups have three major options for funding: self-funding; loans; equity. In this article, we discuss seed financing, when owners give up equity in their small businesses in exchange for funding from third parties. Article discusses Simple Agreements for Future Equity (SAFEs), convertible notes and preferred shares....
Read more
DOJ Provides Guidance on Anti-Corruption Compliance Programs
The DOJ on June 1, 2020 issued a revision to its Evaluation of Corporate Compliance Programs. The new DOJ Guidance provides companies general principles and elements to consider when designing, implementing, and updating their compliance policies and procedures. The DOJ explains that the purpose of the new guidance is to assist prosecutors in making informed decisions whether and to what extent the company’s compliance program was effective at the time of the offense, and is effective at the time of a charging decision or resolution. Prosecutors can then use the guidance to determine the appropriate (1) form of any resolution or prosecution; (2) monetary penalty, if any; and (3) compliance obligations contained in any corporate criminal resolution....
Read more