Forming a Non-Profit Corporation
Non-profit charitable corporations are formed for a wide variety of reasons. Non-profit corporations, also called 501(c)(3) corporations, are tax-exempt from income, sales, and property taxes. A designation of a “non-profit” also may allow a corporation to obtain certain private and public grants or qualify for low-cost postage rates. Forming a non-profit company to undertake charitable work will also secure liability protection for the company’s officers and director.
Creating a legal non-profit corporation involves several steps. Hiring an experienced attorney to help you navigate the process is often the quickest and most efficient way to handle the formation of a non-profit corporation.
Naming Your Non-Profit
One of the first steps in forming a non-profit is choosing a name for the corporation. Each non-profit corporation must have its own unique name, different from any other company incorporated within the state. Checking with your state’s corporations office (often located in the Secretary of State’s office) to make sure there is not another corporation with that name should be the first item on your to-do list.
All non-profit corporations should end with a corporate designator such as “Corporation,” “Incorporation,” or “Limited.” Following the selection of the non-profit name, the corporation may apply for a federal tax identification number (FEIN) from the Internal Revenue Service (IRS).
Articles of Incorporation
Another important step in forming a non-profit corporation is drafting and filing the corporation’s “Articles of Incorporation.” This document lists basic information about the corporation, such as name and office address, and must include specific language in order for the corporation to obtain its tax-exempt status. The requirements for the Articles of Incorporation vary state by state.
An advantage of a non-profit corporation is its tax-exempt status. In order to qualify for that status, a federal 501(c)(3) tax exemption application must be filed with the IRS. There also is an alternative online application, Form 1023-EZ, titled the Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, that can be used in certain circumstances.
Determining which form to use, and how to complete the lengthy Form 1023 is frequently the most complicated part of forming a non-profit corporation. Often, this requires the assistance of an attorney to determine if you meet the IRS eligibility requirements. Depending on the state of incorporation, there may also be a separate state tax exemptions application.
Conducting Non-Profit Business
Forming your non-profit will also require the drafting of by-laws, which will set forth the corporation’s internal governing rules with respect to procedures for meetings, voting processes, and the election of directors and officers. Non-profit directors are responsible for policy and financial decisions and need to be appointed according to your state law.
Under most state laws, non-profits typically have one director. Directors will facilitate board meetings during which minutes need to be recorded and saved.
In order to conduct the business of the non-profit, some non-profit corporations will also need to obtain sales tax permits or zoning permits. In most states, the non-profit must also submit a Charitable Solicitations Registration, prior to soliciting donations.
If you are interested in forming a non-profit corporation or need additional information about non-profits, an experienced Non-Profits lawyer at the MacMain Leinhauser can assist you. To schedule a confidential consultation today, call us at 484-318-7106 or contact us online.
Influenza Season Hits U.S. Prisons
The United States experienced a particularly bad flu season in 2017-2018. Virulent strains of influenza killed many people across the nation. Though not nearly as deadly as the 1918 killer flu pandemic, it leads to a comparison with the swine flu epidemic of 2009.
For years, the recommendation from the Centers for Disease Control and Prevention (CDC) regarding flu vaccinations was that the elderly and anyone suffering from chronic conditions be inoculated. These two groups were viewed as more susceptible.
However, in 2010, the Advisory committee on Immunization Practices at the CDC changed their guidelines. Following that change, they now recommend providing annual flu vaccinations for everyone over the age of six months.
These changes were a direct result of the H1N1 swine flu pandemic that affected many people between the ages of 19 and 49 almost ten years ago.
Prison Populations and CDC Guidelines
Because of overcrowded conditions, a population consisting of inmates mostly in the 19-49 age range, and the lack of good medical care, the nation’s prisons are a fertile ground for a potential flu outbreak. Although the CDC guidelines were changed in 2010, the vast majority of state Departments of Corrections and local jails have ignored the advisory and have not implemented flu vaccinations for the general prison population.
Prison administrators would be well advised to update their policies and procedures to meet the new standard of care. It is much more cost effective to administer the flu vaccine to prisoners, when compared to the cost of emergency room visits and stays in the intensive care unit. Overtime staff, prescriptions, and other medications must also be paid for. According to experts, to prevent a prison flu outbreak, vaccinations must be provided for 70 to 80 percent of the population. This must include administrative staff as well as guards.
Flu Fatalities in Prisons
The 2017-2018 flu season saw many fatalities from influenza or complications of the flu. This included the death of a woman in Oregon at the Coffee Creek Correctional Facility, where only 18 percent of the prison’s population received flu vaccinations. Further, 43 prisoners at Coffee Creek contracted the flu. Afterwards, some alleged that they were never properly notified that the vaccine was available to them.
In Texas at the Montgomery County Jail, vaccines are offered, but not mandatory. Two prisoners there died during the 2017-2018 flu season. In Kentucky, at the Henderson County Detention Center, a prisoner who fell ill with the flu infected 14 other people. The prisoner had to be transferred from the state prison to the jail, in the process exposing guards, staff, and the other prisoners.
As yet, the prison population has avoided a total epidemic of influenza, but administrators should be aware that failure to follow CDC guidelines, which were set forth eight years ago, puts not only their detainees, but also administrators, guards, visitors and the surrounding community at risk.
Judicial Whistleblower Protections
The Pennsylvania Code of Judicial Conduct was adopted by the state Supreme Court in 1974, and since 2010, the Court has required all judiciary employees to report misconduct. Recently, the Commonwealth Court heard arguments about whether the Pennsylvania Whistleblower Law protects judiciary employees who report unethical conduct from adverse employment actions by their superiors. All seven justices were present for the hearing.
The plaintiff was a Washington County juvenile probation officer who alleged unethical practices in his department. He first reported the misconduct to the Administrative Office of Pennsylvania Courts (AOPC) anonymously. An investigation by the AOPC found no wrongdoing. The plaintiff sent a second letter to the AOPC investigator in which he identified himself as the person who sent the anonymous complaint. He alleges that his identity was leaked to his superiors who then took retaliatory actions against him and eventually terminated his employment.
When the plaintiff sued, his case was dismissed on the grounds that he was not protected by the Whistleblower Law. He appealed the ruling. His attorney argued before the Commonwealth Court that the plaintiff was entitled to sue for wrongful discharge under the Whistleblower Law because the Code of Judicial Conduct contains a reference to it.
The Commonwealth Court has ruled against plaintiffs in similar cases twice before. Lawyers for the defendants argued that this case should also be dismissed because they are entitled to immunity and because the reference to the Whistleblower Law in the Code of Conduct does not expand the scope of the law to the judiciary branch. In essence, the judiciary cannot write itself to be included in a law.
Additionally, the defendants’ attorneys maintained that the state legislature did not intend for the law to include the judiciary and that any attempt to do so would violate the separation of powers.
A Second Claim
The plaintiff’s lawsuit made a second claim that his firing violated public policy, which made it illegal, although he was an at-will employee. An exception to at-will employees being fired for any reason at any time is if the termination violates a clear mandate of public policy. His lawyer argued that even if the dismissal of the whistleblower claim is upheld, his second claim should be permitted to go forward. The plaintiff’s argument was that the Supreme Court demonstrated its ability to create public policy by creating the Code of Judicial Conduct and therefore, the Whistleblower Law applies.
Lawyers for the defendants told the court that the conduct code is not public policy and does not contain exceptions for the at-will employment doctrine. Exceptions can only come from the Constitution, a judicial decision, or regulations. The Court has yet to decide on this issue.
If you are an employer who needs additional information about whistleblowing, an experienced employment attorney at MacMain Leinhauser can help. Contact us at 484-318-7106 or submit an online inquiry form.
Layoff Rights for Pennsylvania Employees
The federal Worker Adjustment and Retraining Notification (WARN) Act gives employees the right to a 60-day notice period before a large-scale layoff or plant shut down. If employers fail to give the appropriate notice to employees or their representatives, they may be required to pay the affected employees’ back salaries and benefits or face fines of up to $500 per day of violation.
It is not always easy to determine if an employer is covered by the WARN Act. Understanding how to follow layoff protocol can protect companies from an unexpected fallout.
The Federal WARN Act
Only large employers are subject to the WARN Act and what constitutes a large employer may be cause for confusion. For example, an employer must employ at least 100 full-time workers or have at least 100 employees who work a combined total of 4,000 hours per week. However, the definition of what constitutes full-time varies. For the purposes of WARN coverage, full-time employees are those who work at least 20 hours per week and have been employed with the company for at least six months. Full-time employees can be paid a salary or on an hourly basis.
Once an employer is covered under WARN, layoff notice will be required in the event of a worksite shut down that results in the loss of employment for 50 or more people during a 30-day period. If the site that was closed was a temporary location, no notice is required.
A covered employer must provide notice if a layoff will result in an employment loss of 500 or more employees during a 30-day period. No notice is required when layoffs occur due to the completion of a job or project.
Sale of Business
For those subject to the WARN Act who plan to sell their business, notice will be required if that sale results in a closing or mass layoff. However, if the closing or mass layoff occurs after the sale, the new owner will be responsible to provide notice.
There are several circumstances where employers are not required to give notice or can provide notice with less than 60 days lead time. For example, an employer does not need to provide notice to those on strike or to workers who are part of a lockout.
There are also three circumstances under which an employer can give less than the required 60-days’ notice; though the employer may be required to provide evidence that the condition existed.
- Faltering Company: The opportunity for new business would be diminished if a plant closing was announced.
- Natural Disaster: Closing or layoffs are the direct result of floods, storms, earthquakes, etc.
- Unforeseeable Circumstances: Closings and layoffs that were not expected.
If a company does shorten their notice period due to any of the above circumstances, when the official written notice is given, it must include the reason for the delay.
For more information on how the federal WARN Act affects your company or for assistance with any corporate-related matter, contact an experienced Malvern business attorney at MacMain Leinhauser by calling 484-318-7106 or contact us online.