1. ERA COLT Presentation ~ Thursday, November 8, 2018 Doubletree O’Hare – Rosemont 5460 N. River Road, Rosemont, IL CHAPTER LEGAL AND TAX MATTERS Discussion by ERA Legal Counsel
Gerald M. Newman Schoenberg Finkel Newman & Rosenberg, LLC 222 S. Riverside Plaza, Suite 2100 Chicago, IL Telephone: 312/ , Ext. 309 Cell:847/
nationalsalesrepattorneys.com

2. INCORPORATION AND LEGAL STRUCTURE
TYPES OF CORPORATIONS
Profit
Not-for-Profit
Tax Exempt
REASONS FOR INCORPORATING
Limited Liability
Sophisticated form of Doing Business
Perpetual Existence
Facilitates Transfer of Responsibility and “Ownership”

3. OPERATING THE NOT-FOR-PROFIT CORPORATION
Purpose, i.e., promoting the development, establishment or expansion of industries
By-Laws
Officers
Number of Directors
Responsibilities of Officers and Directors
Meeting Requirements
Elections
Appointments

4. OPERATING THE NOT-FOR-PROFIT CORPORATION (cont’d.)
Committees
Voting Rights
Members/Non-Members
No Dividends
Indemnification of Officers and Directors
Office Lease
Bank Account/Corporate Resolutions
Employer Identification Number (“EIN”)
Management Agreement/Contracts

5. MAINTAINING THE CORPORATION
Annual Corporate Report
Annual Filing Fee
Annual Meetings
Minutes/Preparation, Distribution and Approval
Members, Board of Directors
Election of Directors
By Members
By Directors
Fiscal Responsibility
Master Copy of Important Documents (To Pass from President to President)

6. BYLAWS
Review of ERA National and Southwest Chapter Bylaws

7. INSURANCE
Workman's Compensation - Protects Association against claims by employees
Property Insurance - Protects against fire and theft
Non-Owned Auto
Directors and Officers Liability
Show Liability
No Show Insurance

8. VOLUNTEER PROTECTION ACT
Limitation of Liability For negligent acts or omissions while acting within the scope of responsibility
No insulation from: Liability for reckless, willful or criminal conduct, gross negligence, etc. Operation of motor vehicle, etc. requiring license Violent misconduct, hate crimes, civil rights, etc.
Act does not eliminate the need for associations to maintain liability insurance.

9. TAX MATTERS Application for Income Tax Exemption
Must not be formed or operated explicitly for profit
501(C)6 Business League
501(C)3 Charitable or Educational Purposes (ERA)
No part of an exempt association’s assets or net earnings may inure to the benefit of any shareholder or individual. Can lose exemption for engaging in activities against public policy.

10. TAX MATTERS (cont’d.)
Federal Income Tax Return (Exempt Organization)
If gross receipts are less than $50,000, file form 990-N (electronic notice e-postcard)
If gross receipts less than $200,000 and total assets less than $500,000, file Form 990-EZ – short form return of exempt organization
File Form 990 if gross receipts greater than $200,000 and assets greater than $500,000, file complete 990 Form
All of these are informational returns for the IRS.
Penalty for failure to file is $20 per day, but not to exceed the lesser of $10,000 or 5% of gross receipts
Form can be filed by the Chapter or by its Accountant
State Income Tax Return (Exempt Organization)

11. TAX MATTERS (cont’d.)
State or Federal Reporting Requirements 990T (unrelated business income)
State Sales Tax - Chapters usually not exempt
Unrelated Business Income is Taxable (“UBIT”)
Potentially Taxable/Types of Activities
Advertising Income/Advertising in periodicals, journals and magazines published by Chapter is unrelated business income.
Other Membership Services
Automobile Tires
Telephone Services
Group Insurance
Sale of Mailing Lists
Advise ERA Headquarters if unrelated business income exceeds $1,000.

12. TAX MATTERS (cont’d.) Record Keeping - (See ERA Tax Manual)
Lobbying Expenses
Copies of records to ERA Headquarters:
Employer Identification Number (EIN)
Federal Tax Exemption determination letter
Annual income and expense statement or Audit Report
Form 990N, 990EZ or 990
Form 990T (if filed)

13. SERVICE CORPORATION
Corporate entity for taxable activities
Insulates and protects corporation from losing tax exemption

14. ERA EXPERT ASSESS Legal Service Program
SFNR offers ERA members complimentary 20-minute Expert Access Telephone Conference
Members can confer with experienced attorneys on any rep issue, including:
sales, mergers or acquisitions;
contract drafting and negotiation;
commission recovery measures;
exit strategies;
succession planning;
employee contracts and non-competes;
general legal, business and corporate matters.

15. Questions? Gerald M. Newman www.nationalsalesrepattorneys.com
THANK YOU
Questions?
Gerald M. Newman