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Don’t let “founder’s syndrome” impede your succession plan

Are you the founder of your company? If so, congratulations — you’ve created something truly amazing! And it’s more than understandable that you’d want to protect your legacy: the company you created. But, as time goes on, it becomes increasingly important that you give serious thought to a succession plan. When this topic comes up, many business owners show signs of suffering from an all-too-common affliction. The symptoms In the nonprofit sphere, they call it “founder’s syndrome.” The term refers to a set of “symptoms” indicating that an organization’s founder maintains a disproportionate amount of power and influence over operations. Although founder’s syndrome...

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Bridging the divide with a mezzanine loan

In their efforts to grow and succeed, many companies eventually reach the edge of a precipice. Across the divide lies a big step forward — perhaps the acquisition of a competitor or the purchase of a new property — but, financially, there’s no way across. The money is just not there. One way to bridge that divide is with a mezzanine loan. These instruments (also known as junior liens and second liens) can bridge financing shortfalls — so long as you meet certain qualifications and can accept possible risks. Debt/equity hybrid Mezzanine financing works by layering a junior loan on top of a...

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Upcoming EEO-1 Report Will Not Contain Pay Data Collection

Race, Ethnicity & Gender Reporting Requirement to Remain in Effect The U.S. Equal Employment Opportunity Commission (EEOC) has announced that the upcoming EEO-1 reporting form will not contain pay data collection information. Upcoming EEO-1 Report In July of 2016, the EEOC changed the EEO-1 reporting form requirements, so that private employers with 100 or more employees and certain federal contractors would have been required to report aggregate W-2 income by sex, race, ethnicity, and job group. On August 29, 2017, this change was halted by the U.S. Office of Management and Budget (OMB). Instead, employers should plan to comply with the March...

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IRS warns of new phishing scam

Ransomware Scheme Impersonates IRS and FBI The IRS has issued an urgent warning about a new email phishing scheme that uses IRS and FBI emblems to entice users into clicking a link to download a fake FBI questionnaire. The link downloads ransomware, which prevents users from accessing data from their devices unless they pay the scammers. The IRS advises victims of the scheme not to pay the ransom, as hackers often fail to provide access to the hostage data even after being paid. According to the agency, people with a tax issue will not get their first contact from the IRS with...

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IRS Releases Draft 2017 Forms 1094 and 1095

Final 2017 Versions to be Released Later The IRS has released draft versions of the Forms 1094-B, 1095-B, 1094-C, and 1095-C that employers and insurers will use in early 2018 to report on health coverage offered in the 2017 calendar year. 2017 Draft Forms The following draft forms are now available for 2017: Draft Form 1094-B (transmittal) Draft Form 1095-B Draft Form 1094-C (transmittal) Draft Form 1095-C If finalized, the most significant change to the 2017 forms would be the removal of the "Section 4980H Transition Relief" box from line 22 of Form 1094-C. This transition relief is no longer available to employers. Background The Affordable Care Act (ACA) requires...

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What is the ‘Age 26’ Requirement Under the ACA?

Law Requires Certain Employers to Offer Dependent Coverage Until Age 26 Under the Affordable Care Act, when a plan covers dependents, it must continue to make the coverage available until a child reaches the age of 26, even if the young adult has been offered coverage through his or her own employer, is married, no longer lives with his or her parents, is not a dependent on a parent's tax return, or is no longer a student. There is no federal requirement compelling a plan or issuer to offer dependent coverage. However, applicable large employers may be liable for a "pay or...

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IRS Issues Maximum Individual Mandate Payment for 2017

Guidance Provides 2017 Monthly National Average Premium for Bronze Plans The IRS has released the 2017 monthly national average premium for a bronze level health plan offered through the Health Insurance Marketplace, which is used to determine the maximum individual mandate penalty. New Guidance According to the new IRS guidance, the monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through the Health Insurance Marketplace in 2017 is: $272 per individual (up from $223); and $1,360 for a family with five or more members (up from $1,115). The guidance is effective for taxable years ending after December...

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Ensuring a peaceful succession with a buy-sell agreement

A buy-sell agreement is a critical component of succession planning for many businesses. It sets the terms and conditions under which an owner’s business interest can be sold to another owner (or owners) should an unexpected tragedy or turn of events occurs. It also establishes the method for determining the price of the interest. This may sound cut and dried. And a properly conceived, well-written buy-sell agreement should be — it is, after all, a legal document. But there’s a human side to these arrangements as well. And it’s one that you shouldn’t underestimate. Turmoil and conflicts A business owner’s unexpected death or...

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Protect Your Organization This Hurricane Season

Tips on Preparing Your Business for a Natural Disaster With the start of peak Atlantic hurricane season this month comes the risk of losing essential business records, files, and other materials to floods or damaging winds. To reduce your damage costs and hasten your return to normal business operations, follow the following tips from the Federal Emergency Management Agency (FEMA): Confirm your insurance:  Review the details of your flood and other hazard insurance policies, paying close attention to which items are covered and under what conditions. If you have questions, contact your insurance agent. Back up essential files:  Regularly back up important electronic files...

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DOL Releases Updated Model CHIP Notice

Model Notice Informs Employees of Eligibility for Premium Assistance Under Medicaid or CHIP An updated model notice for employers to provide information on eligibility for premium assistance under Medicaid or the Children's Health Insurance Program (CHIP) is now available for download from the U.S. Department of Labor (DOL). Click here to download the latest employer CHIP notice in PDF format. A Microsoft Word version is also available. Annual Notice Requirement Employers that provide health insurance coverage in states with premium assistance through Medicaid or CHIP must provide employees with the employer CHIP notice annually before the start of each plan year. An employer can...

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