When it comes to the contemporary business structure, have you ever considered about scoping your venture as a nonprofit? In contrast to for-profit businesses, a nonprofit business confers you with specific benefits such as income tax exemptions, sales and property at the state level. While the IRS makes it clear that most of the federal tax-exempt undertakings fall under the category of nonprofit organizations, modeling a nonprofit at the state level however does not instantly provides you an exemption from the federal tax structure. If you are wondering how to start a nonprofit corporation from the scratch, here is a how-to guide that will help you in marching towards the right direction:
How Nonprofit Differs From a Traditional Business?
One of the major differences that determine the uniqueness of nonprofit business compared to the likes of profit corporations is the treatment of profits. The shareholders and owners receive and enjoy the profits when they deal with a for-profit business. On the other hand, with a nonprofit business, if there is any resource left after settling the bills, it has to be put back into the organization. The basic guideline that every nonprofit need to adhere to is providing some contribution to the public. Some of the nonprofits often receive tax-deductible contributions where the individual owns it after contributing to the establishment.
Partnerships – The Building Block for a Successful Nonprofit
Partnerships offer nonprofit organizations an opportunity to broaden the spectrum of their influence beyond their current and existing domains. This implicates working with companies in various parts and regions with a noble intention of solving the modern-day problems for earlier ignored populations. With the growth of these kinds of partnerships, new and fresh entrepreneurial opportunities will begin surfacing in the targeted sectors. Work in a new domain will result in bracing a robust community infrastructure, providing the region’s residents with an opportunity to address the issues that bother their citizens. Whether it is physical aid or cutting-edge technology, sustained nonprofit partnerships can help in designing entrepreneur-friendly societies.
Nonprofit Laws That You Need to Abide By
In order to start your own nonprofit business, you should have a clear understanding of the legalities that deals with the framework of a nonprofit corporation. Nonprofits are categorized under the laws of the state where they are formed. For receiving the federal tax-exempt status, an organization must register with the IRS. You are required to fill out two applications when it comes to registering with the IRS. Here is the paperwork in brief to help you understand the legalities associated with a nonprofit business:
Registering With the State: Nonprofits are required to register with their state for legally practicing their business aspects and deal like a nonprofit organization. You will have to form articles of incorporation as the state generally offers references to work from. Create the articles and ensure filing them with your organization. Follow up with the department of licensing office or the secretary of the state for forms.
Getting the Nonprofit Status: As mentioned above, in order to achieve nonprofit status, you will have to apply to the IRS and it is crucial to the clearance from their end for using their contribution as a form of tax deduction. According to the reports, most of the nonprofits seek the 501 (c) status that allows them tax write-off for the contributors. During the inception of the business, a non-profit must highlight its broad-based public support to the IRS. This can be done within the initial five-year of the business venture. Experts recommend being sprucely honest in describing the working structure of your charitable organization to the IRS, as they have reinforced the scrutinizing policy of the nonprofit applications.
Apply as a Charitable Solicitor: Not only this is crucial in raising money, but also it is important to register as a charitable representative in many states that will help you in getting more contribution in the form of donations. This can be easily done by attaining forms for the secretary of state, the attorney general or other related agency.
Create a Board of Stakeholders: Convene a board of stakeholders will not only aid you in qualifying as a non-profit, but it will also help you in hiring a workforce, raising money, making group decisions and meeting your business objectives. Make sure that the board does not consist of people with whom you have personal relations or with individuals that the corporation does business with.
Finally, make sure that you are writing bylaws to describe the operating procedures of your nonprofit corporation. Hopefully, the aforementioned guide will help you in comprehending the basics of starting a nonprofit and deal with the incorporated challenges with ease.
Businesses need to prepare for Brexit transition now
THE Brexit process has been marred by uncertainty and it still remains unclear what our future relationship with the EU, our biggest trading partner, will be.
By Steve McCrindle, a VAT expert at Haines Watts, looks at things business owners should consider through the transition.
The current transition period is due to end on 31st December, 2020. However, Michael Gove, the Chancellor of the Duchy of Lancaster, revealed in the House of Commons this week that just 24 % of businesses believe they are fully ready for the end of the Brexit transition period. Nearly double – 43% – think the transition period will be extended. The Government however has informed the European Commission that the UK will neither accept or seek an extension to this.
Whether a deal is agreed or we exit on World Trade Organisation terms, it’s clear there will be consequences when it comes to VAT, border control and Customs duty, which, in most cases, will be immediate. This will impact all businesses that trade with the EU.
With only a few months left until the transition ends, businesses need to plan and prepare for all outcomes. While the devil will be in the detail when it comes to the changes, these are some areas that need to be considered.
Supplies of Goods and services and value added tax (VAT)
The movement of goods between Great Britain (GB) (not the UK) and the EU is set to change substantially from January 1, 2021. I use GB because if the Northern Ireland Protocol is executed it will mean Northern Ireland will be treated differently to the rest of the UK. Therefore, it is vital that business owners that trade with Northern Ireland are aware of the consequences post-Brexit.
Exports and imports will replace EU dispatches and acquisitions. Zero-rating for the export of goods will still exist if the relevant conditions are met. As things stand, any goods that are imported are liable for import VAT and potentially Customs duty.
Postponed VAT Accounting for Imports to be introduced
To help lessen this impact, HMRC is going to scrap the current physical charging of import VAT and instead, import VAT will be accounted for by adjustments on VAT returns under a new process called postponed VAT accounting (PVA).
PVA is an automatic process that can help minimise cash outflow for business owners. It will apply to all imports, both from the EU and countries outside the EU. Although there may be different regulations and a process for goods arriving into the UK where the value doesn’t exceed £135.
Status-quo for VAT on services
To avoid double or no taxation, the UK looks set to continue to apply VAT place-of-supply rules in line with the EU VAT Directives, with few changes to the VAT treatment of services envisaged.
What does all this mean for businesses? Well, as examples, business owners will need to think about the business’ liability to be registered for VAT within the EU or alternatively, if they can deregister within the EU. This will be especially important for businesses that provide electronically supplied services to consumers in the EU and also suppliers of goods in GB/UK to non-VAT registered customers in the EU.
New Border Controls
The UK Government confirmed in February that the Brexit transitional arrangements were no longer required and that full Customs controls will be implemented for goods coming into the UK from the EU from January, 1, 2021. However, mainly due to the impact of the Coronavirus crisis, the new requirements will now be introduced in three phases between January and July next year. The Government has also issued a new UK import and export guide to border controls.
During the first phase, businesses importing standard goods will have up to six months to complete Customs declarations. Once the declaration is submitted, any duty will then be due on the goods and the new UK global tariffs (UKGT) will apply. Of course, there will still be checks on controlled goods such as tobacco and alcohol.
From April, the second phase will commence. All imports of products of animal origin, whether that’s meat, honey, milk, egg products or pet food, will need pre-notification and health documentation. This also includes plants and plant products too.
The third phase will kick in from July and any business moving goods will need to make declarations at the point of importation. Customs duty will then be due at this time.
Goods moving between EU Member States are not currently subject to Customs duty and this will remain for UK-EU trade until December 31, 2020. It will only change from January 1, 2021. Businesses will need to plan for Customs duty compliance and also for any financial impact this additional cost will have.
All businesses will need to review their supply chain to ensure they comply with the VAT, border control and Customs duty consequences and requirements post January 1, 2021 and this should be done as soon as possible. Business owners need to prepare for both the administrative and financial impacts – on their businesses over the next few months.
How to maximise your virtual communications for effective team meetings
By Tony Hughes, CEO at Huthwaite International leading global provider of sales, negotiation and communication skills development, shares advice on the key skills your team needs to create a great virtual communications culture.
Virtual meetings are now familiar territory. Despite this, many of us are unaware how to make them truly effective.
Understand the purpose
We’re all inundated with video call after video call, whether that’s for business meetings with colleagues or socialising with friends – it’s become a daily occurrence for most. If you had six or seven face-to-face meetings each day, you would quickly become overwhelmed, so consider this when planning virtual meetings too. Ensure each meeting has a purpose and make it clear to all involved from the start. For example, is the purpose of the meeting to think creatively and generate new ideas or is your aim to get focused and make some important decisions in one or two major areas? Make sure people know what is expected from them in advance.
Also, take into consideration who is attending each meeting. We’re all aware that communicating via video can lead to problems when there are too many people trying to have their say – so don’t overcomplicate it. On the other hand, you don’t want to create additional meetings to communicate the points already agreed so think carefully about who needs to be involved. Base your decisions on your meeting invitations around the meeting purpose.
Engage people in a way that achieves your meeting purpose and manage your communication airtime
Our research into communication skills shows that there are three main classes of behaviour important to group interaction in task oriented situations, these are:
- initiating behaviours– putting forward ideas, concepts, suggestions or courses of action
- reacting behaviours– putting forward an evaluation of other people’s contributions
- clarifying behaviours– exchanging information, facts, opinions for the benefit of the whole meeting.
Feedback on the proportions of these behaviours used in meetings can help groups examine their own behaviour and to assess the need for behaviour change. In effective group communications, all three main behaviour classes are present in a balanced way.
A tip to help set a good, cooperative tone for a virtual meeting and encourage a balance of behaviours is to start discussions with a non-controversial issue where people aren’t committed to a particular solution so a straight forward agreement can be reached, before diving into the more contentious areas of the agenda. This encourages people to listen to and build on others’ ideas from the beginning, will help set the tone for the rest of meeting and will be a useful precedent to refer to. Try to structure meetings in a way that means all points are addressed properly and are fully developed before moving on to another issue or suggestion.
Don’t allow discussions to lead to a breakdown in communication
A strong indicator of an effective meeting is how well people respond to one another’s ideas and proposals. When a creative type meeting is working well, people react positively or at least constructively, to what others say. When a meeting is ineffective, the opposite occurs and tensions can rise leading to a potential communication breakdown which will diminish any successful meeting outcomes.
What we might perceive as a negative attitude can lead to what Huthwaite refer to as ‘Defend/Attack’ behaviour where opinions are expressed more strongly and more directly which can lead to people feeling exposed and becoming overly defensive. Defend/Attack usually involves value judgements and contains emotional overtones.
Avoid these behaviours by responding positively and appropriately and most of all, try to actively listen to what is being said. Really take the time to understand a differing point of view point and respect their position before jumping in with a response. Listening is key and our research shows it is often what separates skilled communicators from unskilled. Taking the time to listen will give you time and space to fully consider other opinions. If you decide you do disagree with what they’re saying, actively listening will leave space around the discussion which offers the opportunity to react in a constructive, rather than an emotional manner.
Avoid irritating verbal behaviours
There are a few verbal behaviours that can be instantly harmful to meeting discussions and apply to meetings both in person and online. Virtual meetings can present multiple communication barriers such as poor connections and technology issues, leading to irritation for all parties involved so it’s important not to add further irritation with the words you choose. Declarations that you are being ‘fair’ and ‘reasonable’ when talking to people can cause tension as they can undermine the person you’re speaking to and may cause lasting damage to your relationship.
Other phrases, such as telling someone you’re ‘being honest with them’ or ‘that you’re trying to be frank’, can be very misleading. You don’t intend to imply that weren’t being honest a moment ago but that is the inference you’re allowing by using these kinds of phrases. Building a reputation that you are selectively honest is the kiss of death to a productive meeting. Steer clear of this kind of language if you want to keep your reputation intact.
Make sure meeting standards don’t slip and build trust in your virtual environment
If you are hosting a business meeting online, it’s important that you don’t let your normal meeting standards slip. Try to nominate a meeting manager/chair who can focus on managing the discussion, making sure everyone speaks their turn and that you cover everything that needs to be discussed. Their purpose is to steer and guide the conversation in a productive manner. It’s helpful if the chair can clarify the information presented and the meeting outcomes, especially for long or heated discussions where meeting focus can shift about very easily. This will ensure everyone is clear about what has been agreed.
Arguably, In an online meeting this can be done even more efficiently than in the real world. This is due to video conferencing features such as the ability to ‘highlight’ a particular participant when speaking or sharing links and additional information. So, if you want a meeting to be productive and efficient, use the rich features of the technology available to keep standards high and meetings effective.
Business and data – building better operations
By Bryan Kirschner, Vice President Strategy, DataStax
Building your business on data. What have we learned so far?
Coming into 2020, running your business based on what your data told you was a reality for some businesses, and a goal for many more. The coronavirus pandemic forced all companies to become more digital and more data-driven.
What lessons have we learned so far, and how can companies improve their data-driven processes over time?
There’s a meme going round about how the C-level term that has had the most impact on business and IT strategy in the past few years is not the CEO or CIO, but COVID-19. For some, this will lead to a chuckle at most. For others, it will ring all too true. In 2020, running your business based on what your data told you was a reality for some businesses, and a goal for many more. The pandemic forced all companies to become more digital and more data-driven.
For all businesses, data will continue to be essential to their operations. According to Rita Sallam of Gartner, the top ten trends for data through the rest of 2020 will be about scaling up and being more agile with data, as “… data and analytics leaders require an ever-increasing velocity and scale of analysis in terms of processing and access to succeed in the face of unprecedented market shifts.” COVID-19 has made this trend inevitable.
What comes next for data?
All companies are therefore becoming ‘data-driven’ companies. The challenge coming up is therefore how data can keep being a differentiator for businesses when every enterprise has access to data and analytics.
While companies can all gather data and use it for their operations, the real differentiator is speed. It’s not just that companies can generate and store data at scale, it’s that they can make decisions faster and then deploy data in valuable ways more quickly than their competitors. This plays into the affirmative side of competing against other companies as well – when markets are healthy and dynamic, new opportunities can emerge that you can take advantage of by moving more quickly.
Asking the right questions to get the right answers
Keep a customer focus in mind for your approach to data. By asking questions that focus on what customers need, you can get a head start in creating value that customers are willing to pay for. For example, asking how much your customers are willing to pay for your data products can quickly show you where you are – either you have a great product in place already that data can improve, or it will show you where you need to work harder around using data effectively.
Similarly, you can use data around your goals to improve your decisions. Asking what data your customers want around their interactions with you, and how you can provide them with insights from that data, can get you started. Alongside this, you can look at more strategic goals like how you can improve your Net Promoter Score over and above your competitors, how to reduce churn, or increase lifetime value, by supplying your customers with data products.
The wrong questions about data focus on internal and political issues. For example, if your team has to answer questions on how to prove the net present value of data over five years, or how to negotiate data access between business units, then your focus is not on the customer. There are other questions that are reasonable to ask – for example, around security of data and justification for storage costs – but these can easily distract you from the opportunities that exist around that data. Discussing these questions can easily lead your teams down rabbit holes.
You will likely be better off solving exactly the governance and security questions you need to in order to deliver one specific, new data-driven experience to customers in the next quarter, and then the next quarter after that, in turn, versus trying to solve them in the abstract. Because those new experiences will themselves generate data, if you ship faster, you will learn faster. This is a new way of working for many, but getting this flywheel spinning is the key to staying ahead if you’re starting ahead–or stealing a march on competitors who don’t realize its importance.
Businesses need to prepare for Brexit transition now
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