Best of… for the week of July 9

Rochefort Trappist Brewery in Abbey of Our Lady of Saint-Remy, Wallonia, Belgium (Photo credit: Wikipedia)

NEXT! Here’s the roundup for this week:

Small Business

I heard a statistic that the most people will have an average of 5 careers in their working life. That means that there’s got to be a lot of people out there with life and work changes. Maybe the best person for the job isn’t the one with the most experience doing that job? Why I Like People with Unconventional Resumés

So… Pinterest, huh? Well, here’s some way that some businesses are using Pinterest to drive their business in real, tangible ways. 5 Ways Brands Use Pinterest To Authentically Connect

If you’re running a business, you’re a leader. Often, whether you like it or not. How do you ensure that you’re effective? Here’s one measure. How Effective Leaders Talk (and listen) – Podcast with Transcript

As en employer, you fall under the ADA (Americans with Disabilities Act). You have to make “reasonable accommodation” for employees with disabilities. What’s “reasonable?” 5 Reasonable Accommodations an Employer Almost Never has to Make.

There’s also the ongoing question(s) about employees and the role of Social Media at home and at work:  Legislatures Aim to Protect Social Media Privacy of Employees and Applicants

While we’re talking about “online” … Protecting Yourself Online Doesn’t have to Involve Legal . While we’re at it, was your password leaked? How to Check if Your Yahoo, Gmail, or AOL Password was Leaked

Lastly… remember to register your trademarks! Avoid a “Heart Attack”: Promptly Register your Trademarks

Beer Business

More on the effects of the AB-InBev/Modelo deal. Ripples from A-B/Modelo deal could extend far and wide.

Trademark issue specific to the beer industry: New Albion is a name that is near and dear to the heart of every small brewer in the US (or it should be, look it up!). Boston Beer Company looks to register the mark.  Boston Beer Co. may need to use ‘New Albion’ mark in order to register it

Woohoo! The coveted and long awaited 8th Trappist Brewery! New Trappist Beer on Sale in UK (maybe the US soon?)

Related articles

• Not On Pinterest? This Chart May Change Your Mind (customerthink.com)
• Dispute “Brewing” Over Alleged Trade Secret Theft (astronomyandlaw.com)
• Demystifying the Law: The Americans With Disabilities Act (blogs.lawyers.com)
• Pinterest for Sellers (vendio.com)

Can a brewery be a non-profit?

Picture of all seven trappist beers (Photo credit: Wikipedia)

Wait, no. I mean intentionally a non-profit organization? I’m sure there are plenty of brewer/owners out there that would readily admit that their business is  currently a “non-profit.” I mean, in the legal, tax-status sense.

And the answer is: maybe.

Maybe

Classic lawyer-speak, “maybe.” What I really mean is that maybe you could, but I don’t think you would want to. But here’s what goes into the analysis:

In order to be a non-profit organization, you have a “charitable purpose.” You can fill out your state paperwork to incorporate as a non-profit corporation (for example, in NC) and be an “entity.” But then, to get the tax benefits, you need to apply for tax exempt status at the IRS. NC, like many states, simply follows the Federal decision on whether your company is tax exempt or not.  And, here’s the kicker, a main goal of your company cannot be “to make money.”

If I can’t make money, why would I start a company? – I hear you ask. Well, the answer to that is, generally, you wouldn’t.

Non-profits Generally

But, there are those that want to give back to the community, help out the less advantaged, etc, without assuming all the personal liability or to go after serious fundraising. I work with several non-profits that focus on everything from providing job training to at-risk youth to providing a home for abandoned children. That’s what the non-profit business structure is made for and where it works best.

Well, can’t I make a little money? – Aha! Sure enough, there’s an entity called an L3C or Low-profit Limited Liability Company.

L3C

Many states allow L3Cs, such as NC, but many states do not, so you need to be sure of what your state does and doesn’t allow. L3Cs, generally, are sort of a hybrid between non-profits and for-profits. For an L3C, the state expects you to (1) have a business that makes money and (2) have a “charitable purpose” that uses the money that the business makes. A good example might be a church or community thrift store. No one opens a church thrift store thinking they’ll retire to the bahamas in a few years. It’s meant to be low-profit. An L3C, just like a non-profit, can pay employees and raise funds. What it can’t do is “intend” to make money for the sake of making money or for the sake of the owner(s).

But what about breweries?

So, how does all that relate to a brewery? Well, as a start-up, a brewery (at least typically) has a long, tough slog to get to being profitable. Could a brewery be a non-profit during that time to ease the expenses (especially the taxes). Answer: No.

The State, and especially the IRS, are going to say that you don’t have a charitable purpose as the goal of the business – so you won’t get your tax-exempt status. Even if you did get your tax-exempt status, you’d lose it eventually as you paid the owners more and more over time, then the IRS might come after your for tax fraud (remember, it brought down Capone!).

Could a brewery be an L3C? Well, yes, actually.

Let’s take the Trappist Abbey of St. Sixtus of Westvlateren as an example (assuming that Westvleteren was in North Carolina – aside: wouldn’t that be AWESOME?!?). The monks at the Abbey have often been asked if they’re going to increase production. They’ve replied (I’m paraphrasing here) “We brew beer so we can afford to run the Abbey and be monks, not the other way around.” This attitude and set-up would be a perfect model for an L3C: a business tightly linked to a charitable purpose where there is little or no excess profit.

But, Westvleteren is a special situation. After all there are only 7 Trappist breweries in the world. It would take a very special set of circumstances for a brewery to want to be an L3C organization and for an L3C to fit the business plan/model.

So, I’ll end this the way I started, I think a brewery could be a non-profit or an L3C, but I’m not sure that a brewery would want to.

Related articles

• TurboTax – Are 501C3 Stock Investment Profits Tax-Exempt? (turbotax.intuit.com)
• Roald Smeets – Westvleteren Brewery (roaldsmeetsbeerinbelgium.wordpress.com)
• IRS Announces that 501(c)(3) Non-profit Organizations which Lost their Tax Exempt Status Are Now Eligible to Apply for Reinstatement (prweb.com)
• Heightened Scrutiny on Non-profits by IRS (getirshelp.com)
• IRS workshops help nonprofits retain tax-exempt status (jsonline.com)
• An Open Invitation for Heart-Centered Entrepreneurs:July 9th Launch of Special Q&A Sessions to answer questions on Non-Profit,501©(3),Tax Exempt and Funding processes (prweb.com)
• Ann Arbor-area brewer helps craft new state rules for small breweries (annarbor.com)