I found the Grant Application to be very misleading, which could cause serious potential problems for Eden Valley Growers (EGV).
I must take exception to the statement that EGV “was founded as a cooperative in 1957.” It is my understanding that after meeting with Frank Bradley, CPA, a national expert and author on cooperatives, the founders decide not to be a cooperative. Accordingly, they incorporated as a domestic business corporation; the bylaws do not contain the language required by the IRS for a cooperative. EVG is not recognized as a cooperative by NYS or the IRS. Below is a more detailed discussion of just a few of the differences between EVG and a cooperative.
It is hard to tell how authorities would look at this. They may: (1.) consider it fraudulent (criminal), (2.) consider it a civil matter and demand a full or partial refund, or (3.) consider it a minor error …show more content…
It is my understanding that the IRS would never issue a favorable determination letter to an organization that allows more than one vote per farm. EVG seems to have many voting shares outstanding with individuals associated with the same farm. Also, they would never allow two directors from the same farm. Did EVG make the misrepresentation regarding EVG being a cooperative in order to cover-up the concentration of voting power?
5.) Generally, cooperative laws favor the small farmers. Each member of a cooperative has one vote; by using retention certificates to finance cooperatives, large farmers put up most of the capital. Did the Development Council assume the EVG favored small growers because it claimed to be a cooperative? Would the Development Council have looked down of EVG if the council knew small growers have to pay a sizable amount to become a member?
Would the Development Council hypothesize that the misrepresentation was an intentional attempt to cover up any of the above
I must take exception to the statement that EGV “was founded as a cooperative in 1957.” It is my understanding that after meeting with Frank Bradley, CPA, a national expert and author on cooperatives, the founders decide not to be a cooperative. Accordingly, they incorporated as a domestic business corporation; the bylaws do not contain the language required by the IRS for a cooperative. EVG is not recognized as a cooperative by NYS or the IRS. Below is a more detailed discussion of just a few of the differences between EVG and a cooperative.
It is hard to tell how authorities would look at this. They may: (1.) consider it fraudulent (criminal), (2.) consider it a civil matter and demand a full or partial refund, or (3.) consider it a minor error …show more content…
It is my understanding that the IRS would never issue a favorable determination letter to an organization that allows more than one vote per farm. EVG seems to have many voting shares outstanding with individuals associated with the same farm. Also, they would never allow two directors from the same farm. Did EVG make the misrepresentation regarding EVG being a cooperative in order to cover-up the concentration of voting power?
5.) Generally, cooperative laws favor the small farmers. Each member of a cooperative has one vote; by using retention certificates to finance cooperatives, large farmers put up most of the capital. Did the Development Council assume the EVG favored small growers because it claimed to be a cooperative? Would the Development Council have looked down of EVG if the council knew small growers have to pay a sizable amount to become a member?
Would the Development Council hypothesize that the misrepresentation was an intentional attempt to cover up any of the above