Haft Law Group FindLaw IM Template 2026-09-08T10:57:27Z https://www.haftlawgroup.com/feed/atom/ WordPress /wp-content/uploads/sites/1204496/2020/11/cropped-favicon-haft-law-firm-1-32x32.jpg On Behalf of Haft Law Group <![CDATA[The business owner’s checklist for hiring in-house counsel services]]> https://www.haftlawgroup.com/?p=47970 2026-09-03T10:58:59Z 2026-09-08T10:57:27Z the right outside counsel to provide in-house counsel services is about more than just legal experience. The best external attorneys function as seamless extensions of your team, understanding your business as intimately as any in-house advisor. The following practical checklist can help you to identify legal partners who are more likely to integrate with your organization.

Responsiveness matters more than you think

In business, timing is everything. Your counsel should treat your urgent matters with the same priority as an in-house attorney would. Look for attorneys who commit to specific response timeframes and honor them. Ask potential counsel about their communication protocols and how they handle time-sensitive issues outside regular business hours.

Industry familiarity is non-negotiable

Generic legal advice rarely serves growing businesses well. Your counsel should demonstrate deep familiarity with your industry's regulatory landscape, competitive pressures and operational realities. During initial conversations, assess whether they speak your language or require constant education about basic industry concepts.

Establish clear communication cadence expectations

Before engaging outside counsel to provide in-house services, discuss and document how often you will connect and through which channels. Consider these communication elements:
  • Scheduled check-ins at regular intervals, even when no active matters are pending
  • Preferred methods of contact for different urgency levels
  • Expectations for progress updates on ongoing matters
  • Protocols for copying relevant team members on correspondence
Setting these parameters upfront prevents frustration and helps to better ensure alignment between your operational tempo and their service delivery.

Proactive issue-spotting separates good from great

Reactive attorneys wait for you to identify problems. Counsel that set out to help you succeed anticipate issues before they materialize. During the vetting process, evaluate whether candidates ask probing questions about your business model, growth plans and potential risk areas. The right attorney will offer insights you have not considered rather than simply responding to your stated concerns.

Integration with your team is the ultimate test

Ideally, counsel will work well with your internal team. Integration factors to watch for can include:
  • Willingness to attend team meetings and strategy sessions
  • Ability to build relationships across your organization
  • Flexibility in billing arrangements that align with your budget cycles
  • Investment in understanding your company culture and values
This shift from simply providing to supporting your business’ culture is often the key to finding the right legal team to provide in-house counsel services. True integration means your counsel thinks like an owner, not just a service provider.

Making the right choice

Hiring a legal team to provide in-house counsel services requires looking beyond credentials and hourly rates. Prioritize responsiveness, industry knowledge, clear communication, proactive thinking and genuine team integration. The right legal partner will not just solve problems but will help you avoid them altogether while supporting your long-term business objectives.]]> by Haft Law Group <![CDATA[The Section 508 Church Exemption: A Filing Exception Sold as a Tax Status]]> https://www.haftlawgroup.com/?p=47979 2026-08-31T04:06:55Z 2026-08-30T04:03:01Z The package looks convincing. A certificate of church status, a set of bylaws, an EIN letter from the IRS, and an assurance that the organization is now exempt and owes the government nothing further. Founders who buy these packages usually discover the problem during an examination, at the point where unwinding is no longer an option. Section 508(c)(1)(A) of the Internal Revenue Code is real. It simply does not do what it is sold to do.

What Section 508 Actually Says

The section is titled “Special rules with respect to section 501(c)(3) organizations.” Subsection (a) provides that an organization formed after October 9, 1969 shall not be treated as an organization described in section 501(c)(3) unless it gives notice to the Secretary that it is applying for recognition of that status. That notice is Form 1023. Subsection (c) supplies the exception: “Subsections (a) and (b) shall not apply to … (1)(A) churches, their integrated auxiliaries, and conventions or associations of churches.” That is the entire provision. It excuses a church from filing an application. The exemption itself comes from section 501(a), and it reaches only an organization “described in” section 501(c)(3). Section 508(c)(1)(A) removes the front door. It does not lower the standard behind it, and it does not create a category of organization that plays by different rules. The IRS says the same thing in its own guide for churches. Publication 1828 states that “Churches that meet the requirements of IRC Section 501(c)(3) are automatically considered tax exempt and are not required to apply for and obtain recognition of tax-exempt status from the IRS.” Everything turns on the qualifier. Publication 1828 does not mention section 508 anywhere in the document.

The Missing Determination Letter Is the Risk

An organization that files Form 1023 and receives a determination letter holds a written answer from the IRS. A self-declared church holds nothing. If the arrangement is later questioned, the organization has to establish, from the ground up and years after the fact, that it is a church and that it satisfies every requirement of section 501(c)(3). That is the trade the promoters leave out. Declining to apply does not remove the test. It moves the test from a review the organization controls at the outset, with a document at the end of it, to an examination that begins after the money has moved and the records are whatever they happen to be.

“Church” Is a Legal Test, Not a Label

Neither the Code nor the regulations define “church.” The IRS weighs fourteen criteria, among them a distinct legal existence, a recognized creed and form of worship, a definite ecclesiastical government, ordained ministers, established places of worship, regular congregations, and regular religious services, applied together with the surrounding facts and circumstances. The courts have added the associational test. In Foundation of Human Understanding v. United States, the Federal Circuit explained that “whether applying the associational test or the 14 criteria test, courts have held that in order to be considered a church under section 170, a religious organization must create, as part of its religious activities, the opportunity for members to develop a fellowship by worshipping together.” 614 F.3d 1383, 1389 (Fed. Cir. 2010). At a minimum, as an earlier court put it, “a church includes a body of believers or communicants that assembles regularly in order to worship.” American Guidance Foundation, Inc. v. United States, 490 F. Supp. 304, 306 (D.D.C. 1980). An entity with no congregation, no place of worship, no services, and a board consisting of one family satisfies neither test. Labeling an operating business an “auxiliary” of a larger ministry does not rescue it either. A parent organization’s exemption does not flow down to a chapter.

Every Other Requirement Still Applies

Section 508(c)(1)(A) softens nothing in section 501(c)(3). The organization must be “organized and operated exclusively” for exempt purposes, with “no part of the net earnings of which inures to the benefit of any private shareholder or individual.” Publication 1828 states the rule without qualification: “The prohibition against inurement to insiders is absolute; therefore, any amount of inurement is, potentially, grounds for loss of tax-exempt status.” Paying a founder’s personal living expenses out of the organization is the textbook violation. In McGahen v. Commissioner, the Tax Court taxed the income to the individual and described the arrangement as “an attempt at creating an ‘incorporated pocketbook.’” 76 T.C. 468, 487 (1981). Where the organization is in fact exempt, insider transactions also carry the excise tax under section 4958: 25 percent of the excess benefit on the insider, 200 percent if it is not corrected within the taxable period, and 10 percent on a manager who knowingly participates. The filing relief that does exist is narrow. Section 6033(a)(3)(A)(i) excuses a church from the annual information return. It does not excuse Form 990-T on unrelated business income, employment tax returns, Forms W-2, withholding, or any state or local obligation.

The Argument Has Been Litigated Before

In Revenue Ruling 2004-27, the IRS addressed the corporation sole version of the same idea, held that a taxpayer cannot use one to exclude income from taxation, called the position frivolous, and warned that promoters may be enjoined under section 7408. A federal court did exactly that in United States v. Harkins, finding the promoter’s representations false and fraudulent because such entities receive no special tax-exempt status under federal law and must independently qualify under section 501(c)(3). 355 F. Supp. 2d 1175 (D. Or. 2004). The promoter’s exposure is not the buyer’s defense. The taxpayer signs the return, and reliance on the person who sold the arrangement is generally not reasonable cause.

The Florida Consequences Arrive Sooner

If the plan includes deeding a residence into the entity, Florida imposes costs that do not wait for an audit. Article X, section 4(a) of the Florida Constitution exempts from forced sale “property owned by a natural person.” A church, an unincorporated association, and a corporation are not natural persons, so the transfer gives up the strongest creditor protection the state offers. The ad valorem homestead exemption goes with it, and section 193.155(3)(a), Florida Statutes, reassesses the property at just value as of January 1 of the year following a change of ownership, which erases accumulated Save Our Homes savings permanently unless one of the statute’s narrow exceptions applies. The religious property exemption does not fill the gap. Property used as a parsonage is used for a religious purpose only where it “is owned by an exempt organization that owns a house of public worship.” Section 196.196(6), Florida Statutes. State licensing follows the same pattern. Florida’s health care clinic licensure exemption reaches “[a]n entity that is exempt from federal taxation under 26 U.S.C. s. 501(c)(3) or (4).” Section 400.9905(4)(e), Florida Statutes. That exemption is only as good as the federal exemption behind it, and a self-issued certificate does not create one.

What Actually Works

A genuine congregation can operate as a church and still file Form 1023. Nothing prohibits it, and the determination letter is what donors, banks, grantmakers, insurers, and state agencies rely on in practice. Keep the founders’ finances entirely separate from the organization’s, seat directors who are not family, and set any compensation through independent persons using comparability data. If the real objective was operating a business with a lower tax bill, the structure does not accomplish it, and every additional month of use converts a planning question into an enforcement question.

Before the Examination, Not After

Haft Law Group advises businesses and nonprofit organizations in Florida, Colorado, and Washington, D.C. If you have been offered a “508” package, or you are already operating under one, the time to have the structure reviewed is while options remain.]]> by Haft Law Group <![CDATA[Six Things on a Client’s Balance Sheet That Should Prompt a Call to a Lawyer]]> https://www.haftlawgroup.com/?p=47971 2026-08-27T16:56:34Z 2026-08-29T13:17:43Z Accountants and wealth advisors see problems before lawyers do. You are in the records every quarter. You see the aging receivable, the missed filing, the entity that never quite got cleaned up, the transfer that happened without documentation. By the time the matter reaches a litigator, the window to fix it cheaply has usually closed. This is written for the professionals who sit closest to those records. None of the items below requires you to give legal advice. Each is a pattern that warrants a call.
  1. A Nonprofit Client That Has Missed Two Annual Filings
Under section 6033(j) of the Internal Revenue Code, an exempt organization that fails to file its required annual return or notice for three consecutive years loses its exemption automatically. The revocation happens by operation of law rather than by IRS determination, it takes effect on the original due date of the third missed return, and there is no appeal. Reinstatement requires a new application for exemption. The second consecutive miss is the moment to raise it. After the third, the conversation is about reinstatement and retroactivity rather than prevention.
  1. A Florida Nonprofit Whose Bylaws Predate July 2026
Chapter 617 of the Florida Statutes was comprehensively revised effective July 1, 2026 and renamed the Florida Nonprofit Corporation Act. Section 617.0206 permits bylaws to contain any provision not inconsistent with law. When the statute moves and the bylaws do not, previously valid provisions can become inconsistent while the document sits untouched in a binder. If you prepare Form 990 for a Florida organization, its governance answers are being given under a statute that was rewritten this summer.
  1. An Entity That Exists Only on the Return
Administrative dissolution is quiet. The Department of State may administratively dissolve a corporation for failing to file its annual report, for lacking a registered agent or registered office, or for failing to update that information. The corporation receives notice and a period to correct the problem, and organizations that are not watching the registered agent’s mail routinely miss it. If you are filing returns for an entity whose registered agent is a former officer, a resigned professional, or an address nobody checks, the entity’s status is worth confirming before the next filing.
  1. A Construction Receivable Aging Past Ninety Days
For contractors, subcontractors, and material suppliers, an aging receivable is not merely a collection problem. It is a clock. Florida construction lien and payment bond rights are conditioned on notices and deadlines that are measured from the first and last dates of furnishing labor or materials, and they are unforgiving. On public projects there is no lien on the property at all, and the remedy is a claim against the contractor’s payment bond under its own notice regime. When a construction client’s receivable crosses ninety days, the question is not only whether it will be collected. It is whether the security for collecting it still exists.
  1. Assets Held in a Single-Member LLC
Clients frequently hold real estate or investment accounts in a single-member LLC on the assumption that a personal judgment cannot reach inside the entity. For multi-member companies that assumption is close to correct. For single-member companies Florida law is materially different, and the protection many clients believe they purchased may not be there. This one surfaces in your work whenever a client consolidates holdings, buys out a partner, or restructures for tax reasons and drops from two members to one. The tax result may be clean. The creditor exposure may have changed.
  1. A Significant Agreement That Nobody Can Produce
If a client describes a material arrangement and cannot produce a signed document, treat that as a finding. Certain categories of agreement are unenforceable in Florida unless they are in a signed writing. Beyond the enforceability question, an undocumented arrangement between business partners is the single most common origin of the disputes that later consume years and six figures.

Why This Matters to Your Practice

None of these calls needs to become a litigation matter, and most do not. The value to you is in the timing. A problem identified at the second missed filing, the ninetieth day, or the moment of restructuring is a problem solved for a fraction of what it costs after it hardens. Haft Law Group works with accountants and advisors across Florida on business, real estate, and nonprofit matters for their clients. If something in a client’s records is prompting a second look, contact the firm.]]> by Haft Law Group <![CDATA[The Credit Manager’s Problem: Securing Payment Across a Portfolio of Florida Jobs]]> https://www.haftlawgroup.com/?p=47972 2026-08-27T16:54:09Z 2026-08-28T13:22:11Z Most writing about Florida construction liens addresses a contractor with one unpaid job. That is not the problem a credit manager at a building material supplier actually has. The problem is thirty or eighty open jobs, each with its own first furnishing date, its own last delivery, its own owner, its own general contractor, and its own clock. No single job justifies sustained legal attention. Collectively they represent the company’s receivable. Portfolio exposure is managed differently from a single dispute. Three points deserve more attention than they usually get.

Public Jobs Have No Lien

There is no construction lien against public property. When a supplier furnishes materials to a public building or public work, the security is not the land. It is the payment and performance bond the contractor is required to record under section 255.05, Florida Statutes, before commencing work. That substitution comes with an entirely separate notice regime, and the deadlines are not the ones a credit department learns for private jobs. A claimant not in privity with the contractor must serve the contractor with written notice of intent to look to the bond before commencing, or not later than 45 days after commencing to furnish. A claimant who has not been paid must then serve a notice of nonpayment, under oath and on the statutory form, on the contractor with a copy to the surety. That notice may not be served earlier than 45 days after first furnishing, and not later than 90 days after final furnishing. An action against the contractor or surety may not be instituted unless both notices were served when required. One detail deserves emphasis because it defeats otherwise good claims. The statute provides that these time periods are measured from the claimant’s last day of furnishing and may not be measured by other standards such as a certificate of occupancy or a certificate of substantial completion. A credit department tracking project milestones rather than its own delivery tickets is tracking the wrong date.

The Small Public Job With No Bond At All

Section 255.05 does not require a bond on every public job. When the work is done for the state and the contract is for $100,000 or less, no payment and performance bond is required. For work done for a county, city, political subdivision, or public authority, the awarding official may exempt a contract of $200,000 or less. On those jobs a supplier has no lien, because the property is public, and may have no bond either. The security is the credit of the customer and whatever the credit application secured. That is a credit decision, not a legal one, but it can only be made if someone asks the question before the first delivery rather than after the first missed payment.

Two Deadlines That Are Not on Your Calendar

A portfolio system that tracks only the standard notice deadlines will still lose claims, because the other side controls two clocks that appear without warning. The notice of contest. A contractor may record a notice of contest of claim against a payment bond, which limits the claimant to 60 days after service to file suit. A claim not sued upon within that window is extinguished automatically. A document that arrives in the mail can convert a year of runway into two months. The demand for a sworn statement of account. A contractor who has furnished a payment bond may serve a written demand on a claimant not in privity for a sworn statement of account. Failure to furnish the statement within 30 days, or furnishing a false or fraudulent one, deprives the claimant of its rights under the bond. Note where that demand goes: it must be served at the address and to the attention of the person designated to receive it in the claimant’s own notice to contractor. The name a credit clerk typed into a notice months earlier determines who receives the document that can extinguish the claim.

Accuracy Is a Condition, Not a Courtesy

The statute treats an inflated bond claim harshly. A notice of nonpayment is fraudulent, and service of it is a complete defense to the claim, if the claimant willfully exaggerated the amount unpaid, willfully included work or materials not furnished, or prepared the notice with willful and gross negligence amounting to willful exaggeration. A minor error or a good faith dispute over the amount does not have that effect, and a negligent inclusion or omission that does not prejudice the contractor or surety is not a default. The practical instruction for a credit department is to claim what the delivery records support and to specify retainage separately where it is included. Padding a number to leave negotiating room can forfeit the claim.

What a System Looks Like

Managing this well is mostly administrative. Capture the first furnishing date on every job at the time of first delivery rather than reconstructing it later. Determine at credit approval whether the job is public or private and whether a bond exists and has been recorded. Calendar the notice dates from the delivery records. Route contractor correspondence to a person who recognizes a notice of contest or a demand for statement of account on sight. Keep the notices accurate. Done consistently, this is inexpensive. Done inconsistently, the loss is not one claim but whichever claims happen to fall in the gaps, and those are rarely the small ones. Haft Law Group represents suppliers, subcontractors, and contractors in Florida construction lien and payment bond matters, and works with credit departments on the systems that preserve those rights before a dispute arises. Contact the firm to review how your open jobs are being tracked.]]> by Haft Law Group <![CDATA[Derivative Suits Against Nonprofit Directors: What Florida’s New Chapter 617 Changed]]> https://www.haftlawgroup.com/?p=47973 2026-08-27T16:53:06Z 2026-08-27T13:28:01Z Chapter 617 has long permitted a derivative action on behalf of a nonprofit corporation. Until this summer that subject occupied a single section, 617.07401, which allowed only members to sue and required a demand on the board. Effective July 1, 2026, chapter 2026-168, Laws of Florida, replaced it with a full framework at sections 617.0741 through 617.0747, governing standing, pleading, stays, dismissal, settlement, and expenses. Two changes matter most: directors and officers may now bring these actions, and a claimant may proceed without having made a demand at all if the complaint explains why. For directors of Florida nonprofits, trade associations, and community associations, this cuts both ways. The path to suing a board is now clearly marked. So is the path to getting such a suit dismissed. Which one a board travels depends largely on what its records show.

Who May Sue

Section 617.0741 imposes a contemporaneous position requirement. A director, officer, or member may not commence a proceeding in the right of the corporation unless that person holds the position when the action is commenced and either held it when the conduct giving rise to the action occurred, or became a member through transfer or by operation of law from someone who did. A person who joins an organization after the disputed conduct, and joins in order to challenge it, does not have standing.

What the Complaint Must Allege

Section 617.0742 requires a verified complaint that alleges with particularity the demand, if any, made on the board to obtain the action sought, and either that the demand was refused, rejected, or ignored before the expiration of 90 days from the date it was made, or why waiting out the 90 days would result in irreparable injury to the corporation or in misapplication or waste of corporate assets causing material injury, or the reasons no demand was made at all. That last option is the significant one. Under the prior section a demand was required, and the 90 day wait could be shortened only in narrow circumstances. A claimant may now plead the reasons no demand was made at all and litigate whether those reasons suffice. The framework still gives a board something valuable: notice and a defined window. A demand that arrives and is handled seriously within 90 days is a demand handled on the board’s terms rather than in front of a judge.

How a Board Obtains Dismissal

Section 617.0744 is the provision directors should understand best. A court may dismiss a derivative proceeding on the corporation’s motion if a qualified group determined, in good faith and after conducting a reasonable inquiry on which its conclusions are based, that maintaining the proceeding is not in the corporation’s best interests. The determination is made by a majority of qualified directors present at a board meeting if they constitute a quorum, or by a committee of two or more qualified directors appointed by majority vote of qualified directors present. On the corporation’s motion, a court may instead appoint a panel of disinterested and independent individuals. Then comes the sentence that decides cases. The corporation bears the burden of proof on the qualifications, good faith, and reasonable inquiry of the group making the determination. A conclusory board resolution will not carry it. What carries it is a documented inquiry: what was reviewed, who was consulted, what was considered, and why the board concluded as it did.

Who Counts as a Qualified Director

Section 617.0143 defines the term. For purposes of a dismissal determination, a qualified director is one who does not have an interest in the outcome of the proceeding and does not have a material relationship with a person who does. Material relationship means a familial, financial, professional, employment, or other relationship reasonably expected to impair the objectivity of the director’s judgment. One provision is easy to misread in the corporation’s favor and easy to misread against it. Under section 617.0143(2)(c), a director is not automatically disqualified merely by being a named defendant, by being a director against whom action is demanded, or by having approved the conduct being challenged. Status alone does not disqualify. An actual interest or material relationship still does, and the corporation still bears the burden of proving the qualification.

The New Officer Standard Creates New Claims

Section 617.0844, also new, sets standards of conduct for officers, including a duty to inform a superior officer, the board, or a committee of any actual or probable material violation of law involving the corporation, or material breach of duty to the corporation, that the officer believes has occurred or is likely to occur. A failure to report up is now a departure from a statutory standard, which is exactly the kind of allegation a derivative complaint is built on. Directors and officers evaluating their exposure should read that section together with section 617.0834, which governs the liability of directors and officers, and section 617.08091, which provides for removal of a director by judicial proceeding.

The Practical Lesson

Nothing in this framework rewards a board that decides quickly and documents thinly. Every protective mechanism in it turns on a record: who was qualified, what inquiry was made, what the board actually considered. Boards that treat minutes as a formality will find the burden of proof difficult to meet. Boards that treat them as evidence will not. Haft Law Group represents Florida nonprofit corporations, their boards, and their officers in governance matters and litigation. Contact the firm to discuss director and officer exposure under the revised chapter 617.]]> by Haft Law Group <![CDATA[HB 797 and Your Association Board: The Corporate Statute Behind Chapters 718 and 720]]> https://www.haftlawgroup.com/?p=47974 2026-08-27T16:51:12Z 2026-08-26T13:29:47Z Board members of Florida condominium and homeowners’ associations follow chapter 718 or chapter 720 closely. Fewer follow chapter 617. That is understandable and, as of July 1, 2026, a problem. Most Florida community associations are incorporated as nonprofit corporations. Chapter 617 supplies the corporate machinery beneath the community association statute: how the entity acts, who may act for it, and what happens when a director’s judgment is questioned. On July 1, 2026, chapter 2026-168, Laws of Florida, comprehensively revised that chapter and renamed it the Florida Nonprofit Corporation Act.

How the Two Statutes Fit Together

Section 617.1703(1) states the rule directly. Chapter 617 applies to a corporation that is an association defined in and regulated by chapter 718, chapter 719, chapter 720, chapter 721, or chapter 723, except where its provisions conflict with those chapters or where those chapters provide otherwise. Where either exception applies, the community association chapter controls. For a board, that means every governance question has two possible answers and an order of operations. Read chapter 718 or chapter 720 first. Where it is silent, chapter 617 fills the gap, and the gap filler was just rewritten.

The Carve-Out Boards Should Not Miss

Section 617.1703(2) provides that sections 617.0605 through 617.0608 do not apply to associations regulated by those chapters, or to any other corporation where membership is required pursuant to a document recorded in the county’s official records. Those four sections address transfer of membership interests, resignation of members, termination, expulsion, and suspension, and purchase of memberships. The exclusion makes sense. Association membership runs with the parcel and cannot be resigned or transferred at will. The risk is a board or a manager reading the new chapter, finding attractive language about member discipline, and applying it. Those provisions are not available to associations, and discipline remains governed by the community association statute and the recorded documents.

A Definition Written Specifically for Associations

Section 617.0143 defines material interest as an actual or potential benefit or detriment, other than one devolving on the corporation or the members generally, that would reasonably be expected to impair the objectivity of a director’s judgment. For associations, the Legislature narrowed it. For a corporation regulated by chapter 718, 719, 720, 721, or 723, or where membership is required by a document recorded in the county property records, material interest is limited to familial, financial, professional, or employment interests. That limitation is deliberate and useful. In a community where directors are neighbors, nearly every decision touches a director personally in some diffuse way. The statute confines the disqualifying interests to four identifiable categories rather than letting any personal stake become an argument for recusal or, later, an argument that a vote was tainted.

Officers Now Have a Statutory Standard

Section 617.0844 is new, and it reaches association officers through section 617.1703(1). It requires good faith, a reasonable belief that the officer is acting in the corporation’s best interests, and the care of an ordinary prudent person in a like position. It also requires an officer to report actual or probable material violations of law involving the corporation, or material breaches of duty to the corporation, up to a superior officer, the board, or a committee. For a treasurer who suspects a problem with the association’s funds, or a secretary who learns records are not being maintained, silence is now measured against a statutory duty.

What Boards Should Do

Have counsel read the association’s articles and bylaws against both statutes, confirm that the conflict of interest procedure matches the new statutory terms, and make sure the board and the manager know which chapter answers which question. The analysis is not difficult, but it now runs through two statutes rather than one. Haft Law Group advises Florida nonprofit corporations, including community associations, on governance, records, and disputes. Contact the firm to review your governing documents against the revised chapter 617.]]> by Haft Law Group <![CDATA[Your Bylaws Were Written for a Statute That No Longer Exists]]> https://www.haftlawgroup.com/?p=47975 2026-08-25T13:32:04Z 2026-08-25T13:32:04Z On July 1, 2026, the statute that governs every Florida nonprofit corporation was rewritten. CS/CS/HB 797, enacted as chapter 2026-168, Laws of Florida, comprehensively revised chapter 617 and renamed it the Florida Nonprofit Corporation Act. The Legislature aligned the chapter with the Model Nonprofit Corporation Act and harmonized it with the Florida Business Corporation Act. Both chambers passed it without a dissenting vote. The revision was not a legislative afterthought. It originated with a Chapter 617 Task Force formed by the Business Law Section of The Florida Bar, which spent years on it because the prior act had not been significantly amended in more than fifteen years. Florida has roughly two hundred thousand domestic nonprofit corporations. Most have not read the new chapter. Their bylaws were drafted against the prior statute, and in many cases drafted years ago. That is the problem.

Why Bylaws Are the Pressure Point

Section 617.0206, Florida Statutes, permits bylaws to contain any provision for the regulation and management of the corporation’s affairs that is not inconsistent with law or with the articles of incorporation. That limitation is easy to overlook while the law sits still. When the law moves, a provision that was valid when adopted can become inconsistent without anyone touching the document. The practical consequence is that a board can follow its own bylaws precisely and still be out of compliance. Nothing announces the conflict. It surfaces when a member challenges an election, when a director demands records, when a dispute reaches litigation and opposing counsel reads the governing documents against the current statute.

Four Places the New Act Reaches Bylaws

Officer conduct. Section 617.0844 is entirely new. It requires an officer to act in good faith and in a manner the officer reasonably believes to be in the corporation’s best interests, and to discharge duties with the care an ordinary prudent person in a like position would reasonably believe appropriate. It also imposes an affirmative obligation to inform a superior officer, the board, or a committee of any actual or probable material violation of law involving the corporation, or material breach of duty to the corporation, that the officer believes has occurred or is likely to occur. Bylaws that describe officer duties in purely administrative terms now understate the standard. Derivative litigation. Sections 617.0741 through 617.0747 install a detailed derivative proceeding framework, and the right to bring these actions now extends to directors and officers rather than members alone. Indemnification and advancement provisions drafted before this framework existed deserve a fresh look. Conflicts and qualified directors. Section 617.0143 introduces defined terms that now carry real weight, including material interest, material relationship, and qualified director. Conflict of interest policies written around a general recusal concept should be conformed to the statutory vocabulary, because the statute uses these terms to decide who may act on the corporation’s behalf. Membership and meetings. The Act changes membership and meeting requirements, including provisions for remote meetings and proxy voting. Bylaws that predate remote participation, or that were amended hastily during the pandemic, frequently do not match the current default rules.

What a Review Actually Involves

This is not a proofreading exercise, and the central skill is sorting. The revised chapter contains two kinds of rules. Some are defaults that apply only where the articles or bylaws do not provide otherwise, and for those the organization’s own documents still govern. Others are mandatory, and for those a contrary bylaw provision gives way no matter how long it has been on the books. A review reads the governing documents provision by provision, sorts each rule into the correct category, identifies what is now inconsistent, and prepares the amendments. For most organizations the result is a short list of targeted changes rather than a rewrite. The value is in knowing which list you are on. Boards that wait will not learn the answer on their own schedule. They will learn it from a member, a regulator, or a plaintiff.

Before Your Next Board Meeting

Haft Law Group advises Florida nonprofit and tax-exempt organizations on governance, formation, and compliance. If your articles and bylaws have not been reviewed against the Florida Nonprofit Corporation Act as revised, contact the firm to schedule that review.]]> On Behalf of Haft Law Group <![CDATA[Benefits of 501(c)(3) and 501(c)(4) sister organizations]]> https://www.haftlawgroup.com/?p=47965 2026-08-25T14:40:05Z 2026-08-14T20:47:44Z Many leaders who run charities face a tough problem. They want to help their communities, but they also want to change laws and policies that create problems in the first place. However, they worry that speaking up too much might hurt their nonprofit’s special tax status. Fortunately, the “sister organization” model offers a smart solution that lets you do both.

Why one nonprofit cannot always handle everything

Your 501(c)(3) nonprofit comes with significant benefits. Donors can deduct their gifts on their taxes, you can apply for grants, and people trust you as a charity. However, the IRS puts strict limits on how much these organizations can lobby or try to influence laws. If your mission naturally pushes you toward changing policies or fighting for community reforms, you will quickly run into these limits. Staying within the rules means you have to hold back your voice, a compromise many passionate leaders refuse to accept.

How the sister organization model works

The solution creates two separate organizations that work together. Your 501(c)(3) continues running charitable programs, educational projects, and community services. At the same time, you start a 501(c)(4) social welfare organization that can engage in unlimited lobbying to further its mission and do broader advocacy work. Think of them as siblings with different jobs but the same goal. The (c)(4) can freely discuss policy issues, support specific laws, and rally community members without risking your charity’s status. This dual structure is not a loophole. The United States Supreme Court approved it in Regan v. Taxation With Representation of Washington, 461 U.S. 540, 544 n.6 (1983), so long as the two organizations are separately incorporated and keep records adequate to show that tax-deductible contributions are not used to pay for lobbying. One tradeoff requires candor with donors: contributions to a 501(c)(4) are generally not tax-deductible as charitable gifts, so each organization raises its own funds.

Why business leaders like this structure

CEOs and community-focused boards love this model because it helps organizations grow without giving anything up. You can:
  • Increase your impact by tackling both immediate community needs and the bigger policy problems that cause them
  • Protect your donors’ tax deductions and your grant eligibility by housing advocacy in the (c)(4)
  • Connect with supporters who specifically want to fund direct advocacy work
  • Build a stronger approach to solving the problems you care about
This double structure gives you flexibility while keeping each organization’s purpose clear and separate.

Keeping both organizations legal and separate

Making this work requires clear boundaries between your two organizations. Each one needs its own governing documents, separate bank accounts, and distinct records. The IRS watches carefully to make sure you do not mix them up. Your (c)(3) cannot pay for your (c)(4)’s lobbying work, and you must document any shared resources (like office space or staff time) at fair market value. A new 501(c)(4) also faces an immediate deadline: it must notify the IRS of its intent to operate under Section 501(c)(4) by filing Form 8976 within 60 days of formation. This separation protects your charity’s status while giving your advocacy organization the freedom it needs.

Moving forward with confidence

If your mission connects to policy change and you want to speak up louder for what you believe in, then setting up a sister organization may be the right structure. Working with a legal team experienced in nonprofit and tax-exempt organization law can help you set up and maintain these organizations correctly. The right counsel will not just handle the paperwork: they will help you grow your mission and expand your charitable work for the greater good.]]> by Haft Law Group <![CDATA[The Fractional General Counsel: Big-Firm Strategy Without the In-House Payroll]]> https://www.haftlawgroup.com/?p=47967 2026-08-25T14:40:10Z 2026-08-14T05:13:35Z Every consequential business decision carries legal weight. Signing a supplier agreement, hiring a key executive, taking on an investor, terminating an underperformer: each move either strengthens your company’s position or quietly plants the exposure that surfaces two years later as a lawsuit. Large corporations manage this risk by keeping a general counsel in the room when decisions are made. Most small and mid-sized companies cannot justify that payroll line, so they default to the opposite approach and call a lawyer after the demand letter arrives. There is a middle path. A fractional general counsel gives your company the in-house function, an attorney who knows your business, your contracts, and your people, on an hourly basis instead of a full-time salary.

What a Fractional General Counsel Actually Does

The value of the model lies in routine work handled continuously rather than in emergencies. Contracts before signature. Customer agreements, vendor terms, leases, and nondisclosure agreements are reviewed and negotiated before they bind the company, not litigated afterward. The most expensive contract is the template nobody read. Employment decisions. Offer letters, restrictive covenants, terminations, and handbook policies are where growing companies generate the most avoidable claims. Florida law here is moving. The CHOICE Act, chapter 2025-213, Laws of Florida, took effect July 1, 2025 and is codified at sections 542.41 through 542.45, Florida Statutes. It permits covered noncompete and garden leave agreements of up to four years with certain high-earning employees, and it directs a court to preliminarily enjoin a breaching employee subject to a clear and convincing rebuttal, but only when the agreement satisfies the statute's specific requirements. Companies still using older forms may be leaving that protection on the table. Corporate housekeeping. Annual filings, minutes, resolutions, and ownership records seem trivial until a dispute, a sale, or a lender’s due diligence exposes the gaps. Dispute triage. When a demand letter or subpoena arrives, counsel who already knows the file can preserve evidence, control communications, and evaluate resolution options before positions harden. Strategic counsel. Deal structure, risk allocation, insurance coverage, and the judgment call every company eventually faces: when to fight and when to resolve.

The Economics

A full-time general counsel commands a six-figure salary plus benefits, and most companies below a certain size do not have forty hours of legal work each week. The default alternative, hourly engagements that begin only after a problem exists, costs more than it appears. Every new matter starts with counsel learning your business at your expense, and reactive work is performed at crisis rates on a crisis timeline.

The Continuity Advantage

The reactive model has a structural flaw: the lawyer you call in a crisis is a stranger to your business. A fractional general counsel is the opposite. The attorney reviewing this week’s vendor agreement is the same one who negotiated last quarter’s lease and drafted your key employee’s restrictive covenant. Context compounds, and advice arrives in minutes rather than after a new-matter intake billed by the hour. There is a second advantage that matters when prevention fails. Because attorney Scott Haft is a commercial litigator and a Florida Supreme Court certified circuit civil mediator, the preventive work is done with the courtroom in mind. Contracts are drafted the way a judge will read them. Records are kept the way they will be produced in discovery. If a dispute cannot be resolved, your company enters it with a file built for the fight rather than one assembled after the fact.

When the Model Fits

A fractional general counsel makes sense for companies with recurring legal needs that fall short of a full-time role: a steady flow of contracts, a growing headcount, regulated customers, an upcoming financing or acquisition, or an owner tired of discovering legal problems only after they have matured. If your legal spend spikes unpredictably, or agreements are being signed that no attorney has read, the function is missing.

Put a General Counsel in the Room

Haft Law Group provides in-house counsel services to businesses in Florida, Colorado, and Washington, D.C. If your company has outgrown calling a lawyer only when something breaks, contact the firm to discuss a retainer structured to your actual needs.]]> by Haft Law Group <![CDATA[The Florida Nonprofit’s Annual Legal Calendar]]> https://www.haftlawgroup.com/?p=47964 2026-08-04T09:00:58Z 2026-08-04T09:00:58Z Tax exemption is not a status an organization obtains. It is a status an organization maintains, and it is lost on a schedule. The filings below are unglamorous, individually simple, and collectively the reason several thousand organizations lose their exemption every year without anyone intending it.

The Federal Return

Most exempt organizations file an annual return in the Form 990 series, due the 15th day of the fifth month after the close of the accounting period. For a calendar-year organization that is May 15. Churches and certain church-affiliated organizations are excepted under section 6033(a)(3) of the Internal Revenue Code, an exception narrower than many boards assume. Which form depends on size. Organizations with gross receipts normally at or below $50,000 file the Form 990-N e-Postcard. Those below $200,000 in gross receipts and $500,000 in total assets may file Form 990-EZ. At or above those figures, the full Form 990 applies. Form 8868 buys an automatic six-month extension, but only if filed before the original due date, and it does not apply to the 990-N. Small organizations therefore have the least paperwork and the least margin.

The Three-Year Clock

This is the one that ends organizations. Under section 6033(j), an organization that fails to file a required annual return or notice for three consecutive years loses its exemption automatically, effective on the original filing due date of the third missed return. The revocation happens by operation of law. There is no warning letter and no administrative appeal. The consequences arrive together. The organization becomes taxable and must begin filing Form 1120 or Form 1041. Contributions stop being deductible. The name appears on the IRS Auto-Revocation List, which is published monthly and permanently searchable by every grantor and donor who looks. Reinstatement requires a fresh exemption application. Note what triggers this. Three missed e-Postcards, each of which takes minutes, produces the same result as three missed Form 990s.

The Florida Annual Report

Every Florida nonprofit corporation files an annual report with the Division of Corporations, due May 1. Here is where nonprofits get comfortable. The $400 late penalty that terrifies for-profit filers does not apply to nonprofit corporations, so May 1 arrives and passes without financial consequence, and the filing slides. What does apply is administrative dissolution. An entity that has not filed by the third Friday in September is administratively dissolved or revoked at the close of business on the fourth Friday. A dissolved corporation cannot sue in Florida courts, and reinstatement requires an application plus all accumulated fees. Two May deadlines, one week apart, neither of which generates a bill for missing it. That combination is why this month deserves a calendar entry rather than a good intention.

Registration to Solicit

Separate from all of the above, an organization that solicits contributions in or from Florida must register with the Department of Agriculture and Consumer Services before soliciting, and file a renewal statement annually thereafter. § 496.405(1), Fla. Stat. Exemptions exist under section 496.406, including for certain small organizations using only unpaid volunteers. The scheduling trap is that renewal runs on the anniversary of the department’s approval of the initial registration, not the fiscal year end. § 496.405(1)(a). An organization that has aligned every other obligation to its accounting calendar will find this one falling somewhere else entirely, and a lapse means the organization cannot lawfully solicit, which for a donation-dependent charity is not a paperwork problem.

Unrelated Business Income

An organization with $1,000 or more of gross unrelated business taxable income files Form 990-T. Advertising revenue, some sponsorship arrangements, and income from debt-financed property are the usual sources, and the line between related and unrelated income is misread often enough that it deserves an annual look rather than an assumption carried forward.

What Has No Deadline but Still Matters

The Form 990 asks whether the organization has a written conflict of interest policy, whether it is monitored and enforced, and whether the board reviewed the return before filing. Nothing forces an organization to do those things on a date certain. The return simply records the answer, under penalty of perjury, every year, in a document the public reads. Most of the annual cycle above is not difficult. It is only relentless, and in most organizations no single person owns it.]]>