To: Supervisor.
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To: SupervisorFrom: EmployeeRe: Career Institute of America, Inc. (CIA)Date: December 6, 2016Summary of Applicable Facts:The CEO of CIA is looking for a change in the business organizationfrom its current status of a nonprofit corporation formed as per theguidelines of s1901 of Delaware Uniform UNIN- corporated non-profitassociation Act. However, considering the objectives and operations ofthe business, formation of Limited Liability Company (LLC) would bemore suitable option. CIA specializes in training students in auto industry where most part oftheir revenues come from online training courses. The company is clearon hiring only independent contractors under the Fair Labor StandardsAct who are not to be construed as employees of the company.Issues:The key issues for the business currently relate to the formalitiespertaining to the organization, paperwork and high fee payable, makingit unviable. Since the company is planning to expand its operations, amore flexible business organization is preferred. As regards the classification of workers are concerned, whether they fallunder the category of IRS 20 Factor test, and can be designated asindependent contractors instead of employees?Law: The current laws relating to The General Corporation Law is designed toprovide the ease of carrying out of business, change the status of theexisting business and also allow change in the business structure.Section 18-101 of the Delaware Limited Liability Company Act[ CITATION Sta16 \l 1033 ]provides for the limited liability company interestas well as provides scope for permissible indemnification from claimsand demands whatsoever. However, the tax exemptions for non-profit
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