Alternatives to the Traditional Corporation/409A Extended Documentation Deadline
Alternatives to the Traditional Corporation7 Cool Companies
identifies 7 alternatives to the traditional corporation and provides an example of each:
- "Employee Ownership - W. L. Gore, Newark, Delaware and 45 locations worldwide, Founded: 1958 / Employees: 7,500 Annual Revenue: $1.84 billion"
- "Social Enterprises - Pioneer Human Services, Seattle, Washington, Founded: 1963 / Employees: 1,000 Annual Revenue: $60 million"
- "Creative Cooperatives - Weaver Street Market, Carrboro, North CarolinaFounded: 1988 / Worker-owners: 92, Consumer-owners: 9,794 / Annual Sales: $20 million"
- "Community Development - ONE DC, Washington, DC, Employees: 8 / Housing Units Organized: 1,000+ Annual Revenue: $750,000"
- "Community Land Trusts - Champlain Housing Trust, Burlington, Vermont, In operation since: 1984 / Members: 5,000+ Annual Revenue: $5.9 million"
- "Cutting Edge Ownership - Market Creek Plaza, San Diego, California, Initial Public Offering: 2006 / Number of Investors: 416 Project value: $23.5 million"
- "Public Pensions CalPERS, Based in Sacramento, California, Founded: 1932 / Plan Participants: about 1.5 million Assets: $244 billion"
The article provided the following employee ownership comments:
Employee ownership and a highly egalitarian workplace culture make W.L. Gore very different from your typical corporation. A worker may be a team leader on one project and follow others on another. Compensation is not determined by "the boss," but is tied to your contribution and decided by a committee, like many law firms. The firm regularly ranks on Fortune's "Best Companies to Work For" list.
Gore is best known for its Gore-Tex fabrics, but also is an industry leader in other areas. Gore's heart patches and synthetic blood vessels have been implanted in more than 7.5 million patients. When Gore was founded, there were fewer than 300 employee-owned businesses in the United States. Now workers own a growing share of nearly 10,000 American businesses. All told, 10.5 million employee-owners own $675 billion in business assets. This ownership stake is financed by workers' pension contributions through Employee Stock Ownership Plans (ESOPs). Workers do not "run" most ESOPs, but federal law gives them control over "major decisions" such as merger or dissolution, which leads ESOPs to keep jobs and capital anchored in home communities. Many ESOPs, like Gore, informally give workers considerable say. ESOPs also financially benefit their employee owners. The average value of an ESOP retirement account now exceeds $64,000, far greater than most people's 401(k) holdings.
We previously discussed W.L. Gore in the following posts:
Employee Involvement Tips/S Corporation ESOP Taxation/Transfer of QRP to a GRAT
Ownership Culture vs. Traditional Culture
409A Extended Documentation Deadline
The Treasury Department and the Internal Revenue Service (IRS) released the following press release on Monday:
The Treasury Department and the Internal Revenue Service (IRS) announced today that taxpayers will have until December 31, 2008 to bring documents into compliance with the final nonqualified deferred compensation regulations under section 409A of the Internal Revenue Code.
In April, Treasury and IRS issued final 409A regulations, which provided guidance regarding the requirements for deferral elections and payment timing under section 409A. Affected plans and arrangements were required to comply with the final regulations by December 31, 2007. IRS Notice 2007-78 extends the document compliance deadline for one year and provides additional limited transition relief, but does not extend the January 1, 2008 effective date of the final regulations.
Notice 2007-78 also announces that Treasury and the IRS anticipate issuing guidance containing a limited voluntary compliance program that will permit corrections of certain unintentional operational violations of section 409A.
The final regulations were in response to legislation enacted by Congress in 2004 to address concerns involving reported abuses of nonqualified deferred compensation plans.
For a link to the press release and additional information, check out the information page: Notice 2007-78 - 2008 Transition Relief and Additional Guidance on the Application of § 409A to Nonqualified Deferred Compensation Plans
For more information on the new and improved Rules and Regulations section of our website, check out Rules and Regulations Section.
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