PLANNING FOR MERGERS AND NAME CHANGES

By August 8, 2018 August 28th, 2018 Blog, Newsletter

In response to the changing nonprofit and business landscape, you may be in the process of merging with, or at some point consider merging with, a similarly situated organization. As nonprofits work to best serve the interests of their communities while maximizing resources, a merger can help you further your mission. But as you evolve to meet the needs of the populations that you serve, donors, and your Board, the state-required logistics of planning for a merger may not be the first thing that comes to mind.

501(c) Agencies Trust members planning for a merger are urged to consider unemployment as part of the planning process. Depending on which organization is the surviving organization, and whether that organization elected the reimbursement method, a merger could impact your Trust Membership. Mergers can be beneficial, but the unemployment aspects require detailed planning so that your business and unemployment accounts are properly joined in the eyes of the state labor department.

To prepare for merging with another organization:

  • It is also helpful if you tell us which organization is the surviving entity (in other words, under what state account number will you report future wages?).
  • Will there be a legal name change? If so, we’ll need to update your account information, email addresses, and unemployment handling authorization with the state.
  • Contact us as early as possible in the merger planning process so that we can help you determine the financial impact of staff reductions. We can help you calculate what those potential costs will be.
  • If your new partner was paying the state unemployment tax, the state system will bear the unemployment cost for any of those staff who are laid off immediately as a result of the merger.  If the reduction in those staff takes place after the merger both, the state system and your Trust reserve fund could be impacted.
  • We recommend a review of your current year’s deposit to ensure that it is still appropriate considering the fact that the combined organization probably has a larger payroll than what your original deposit was originally based upon.

As well, did your organization’s name change? Are you going by a dba? Maybe a name change resulted from a merger. Or, perhaps your organization’s name changed due to rebranding.

It is always important to let us know of a name change, so that we can update your account and ensure that important financial and unemployment claim documents continue to be directed to the proper entities.

If your organization’s name legally changed, we’ll need some information to update your account.

  • Effective date of the name change.
  • Copy of the Articles of Incorporation or letter from the Secretary of State, reflecting the change.
  • The reason for the name change is also helpful.

Once we receive the above information from you, we will need your help to complete a new Letter of Authority, to ensure that claims continue going to your dedicated claim consultant for handing.

For more information or to notify us of your 501(c) Agencies Trust account changes, please contact us at (800) 442-4867.

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