This page will continuously develop to share the details of sustainable community building tax-related processes and the details of One Community’s tax process specifics. It includes what we annually file for our nonprofit, what we’ll need to file for any for-profit activities, and other sustainable community tax-related resources.
We discuss these areas with the following sections:
NOTE: The content of this page is from our research and work completed by industry professionals. We will continuously update this page with our experience but you should still have a professional of your own check your tax compliance and details.
Open source tax processes are the complete tax processes we’ve researched for operating a sustainable community as a business entity. One Community is a nonprofit 501(c)(3) organization, but we’ve also included here for-profit tax details. As One Community continues to develop, builds the Duplicable City Center and each of the 7 villages, and launches and maintains our revenue streams, we will continuously update this page to share all the specifics of our tax processes and ongoing considerations.
Here is One Community’s annual nonprofit tax responsibilities and process:
If One Community were a for-profit business, this would be our tax process:
NOTE: These may be needed for non-profit also.
One Community is meant to function effectively as either (or both) a for-profit and nonprofit entity. Open sourcing our experience and research into both tax processes and other tax considerations related to community setup is purposed to teach people what to consider before starting and exactly what each process entails. This is so people can make more educated decisions about what kind(s) of entity(s) they wish to set up and where might be the best places to start a community if land hasn’t been purchased yet.
Taxes should be considered when beginning any community building project. Early consideration is important because taxes are different in different countries, different states, and different counties. This page is focused on the US (for now), and purposed to help people find the information they need as part of their US development process and/or their state and county selection process.
The following areas are discussed:
The best way to understand taxes for a specific area is to talk to a tax specialist within that area. There are resources though that can help you to have a basic understanding of the tax differences for various areas. Here are a few examples showing these tax differences between different states and counties. How important these differences are will differ greatly based on the goals and financial structure of your own community. Here are a few examples to put the differences in perspective:
To review the most current details for each state and access the state-specific tax documents, here are links to each state’s government tax page. If you are just beginning to consider a location, and you don’t know what state you want to build in, we suggest reading this entire page before beginning any state-specific research. This will help you to better understand what you are looking for.
So, what are the tax concerns that you need to be aware of if you are starting a community? To answer this question, it is helpful to think of your community as a business because “businesses” are what the tax code was written for. With this in mind, many aspects of a business influence the amount of tax due, and even the slightest change of the daily operation can result in hundreds of dollars in tax savings or wasting. This number can balloon to thousands, tens of thousands, or even more if your business/community becomes large enough.
Here are some factors that you might want to be aware of during tax planning:
Another consideration when forming any collaborative community is whether to operate as a for-profit, nonprofit, neither, or both. There are significant differences between the taxation of for-profit and non-profit entities. Operating as “neither” would mean that the community is just group of people living together and not having any specific entity structure.
Here is a general comparison between a nonprofit and for-profit entity:
Here is a side-by-side comparison of the taxation rule differences between a nonprofit (NFP) organization and a for-profit (FP) business:
Property tax consideration includes location, purpose, and market value. A NFP organization might be exempt from the property tax if the whole property is used for qualified purposes. The insurance expense and coverage on the property varies. If the property is owned and managed by the company, the insurance can cover both the building and the office content. But if the property is leased from a third party, the insurance can only cover the office content.
NFP organization who received tax exempt status will not be subject to sales tax and income tax, which can be huge savings for the company. However, the sales tax exemption is only valid on purchases of necessities used in qualified activities. For example, when hospitals make purchases of medicines, it will qualify as a necessary product and will be free of sales tax, but if they buy shavers to sell in the pharmacy store, this purchase will be considered unnecessary and thus will not receive the tax benefit. Similar rules apply to income tax exemptions, only the portion of income that is directly related to the qualified activities will be tax free.
Employee taxes include Social Security tax and Medicare tax. The tax rate changes every year and it is calculated by multiplying a certain percentage with the employee wages. The employee tax rates are the same for NFP and FP companies. For organizations that hire unpaid volunteers, the employee taxes will be greatly reduced because the wages are considerably lower than for-profit businesses.
Initially, One Community thought that some aspects of One Community’s revenue generating ventures like eco-tourism, sale of products, etc. would only be able to be operated as for-profit. Thanks to the help of our tax and accounting consultants, we’ve now come to believe that all aspects of One Community can be part of our nonprofit. Any that aren’t will be covered with complete details on our for-profit page.
For organizations like ours that are seeking to operate as 100% nonprofit, here are the steps you need to get started:
As we’ve already discussed, classifying your organization as nonprofit has significant tax benefits. However, to classify any revenue generating venture as not-for-profit, you must satisfy several key criteria:
If an organization fulfills the standards above, it can file Form 1023 to IRS to apply for recognition of exemption under Section 501(c)(3). Section 501(a) focuses on other nonprofit or tax-exempt organizations. The qualified organizations under Section 501(a) can file Form 1024 to IRS to apply for recognition of exemption.
Here are the steps you can expect when applying for tax exemption status. To help understand the paperwork, you can also click here for copies of everything we filed when we applied for our nonprofit status.
Additional Note: If you intend to apply for 501(c)(3) status, you must notify the Internal Revenue Service within 27 month from the date of formation if you desire to be treated as a 501(c)(3) from the date formed.
The IRS requires tax exempt organizations to file annual returns. There are some exceptions, click here for details. Here is an overview of what is required.
The initial return date is the 15th day of the fifth month after the organization’s ending date of tax year, the first extended due date is the 15th day of the eighth month after the organization’s ending date of tax year, and the second extended due date is the 15th day of the eleventh month after the organization’s ending date of tax year.
For example, an organization’s ending date of tax year is December 31, its initial return date would be May 15th, the first extended return date would be Aug. 15th, and the second extended return date is November 15th.
If a due date is not on a business day, the due date is delayed until the next business day.
Check all pages work
According to section 6033(j) of the Internal Revenue Code, organizations that do not file for three consecutive years automatically lose their exempt status. An automatic revocation is effective on the original filing due date of the third annual return or notice.
IRS posts the list of organizations which fail to file annual return for three consecutive years. These organizations are no longer exempt from federal income tax. Consequently, they may be required to file Form 1120 or Form 1041 and pay applicable income taxes. Furthermore, these organizations are not eligible to receive tax-deductible contributions and will be removed from the cumulative list of tax-exempt organizations provided by the IRS.
However, these organizations have opportunities to reinstate their tax-exempt status in four different ways. You can read more about this here.
There are still some taxes nonprofits have to pay. We discuss these here:
If the non-profit organization have employees, they must hold employment taxes from their employee’s wages. The employment taxes include federal income tax withholding (FITW), social security and Medicare taxes (FICA), and federal unemployment taxes (FUTA).
In general, the organization (employer) must deposit federal income tax withheld, and both the employer and employee social security and Medicare taxes. The organization has to decide which deposit schedule to use, monthly or semiweekly, before each calendar year. Reviewing Publication15 for Forms 941, 944 and 945, or Publication 51 for Form 943 can help the organization determine the payment schedule. A maximum penalty is up to 15% if the organization doesn’t make a timely deposit.
There is a base limitation for Social Security tax, which means the organizations withhold their employee’s gross wages until they reach an annual base limit, and employee’s wages above the limit are not subject to social security tax.
However, all wages are subject to the Medicare taxes.
To report employer’s quarterly federal tax return, use Form 941.
FUTA is only paid by the organizations, and employee don’t have to pay for it.
An organization that is exempt from income tax under section 501(c)(3) of the Internal Revenue Code is also exempt from FUTA. An organization that is not a section 501(c)(3) organization is not exempt from paying FUTA tax.
To report employer’s annual federal unemployment (FUTA) tax return, use Form 940.
Besides, if a person services a non-profit organization as an independent contractor, the organization does not generally have to withhold or pay any taxes on payments to him/she.
To differentiate employee and independent contractor, you can find more information in this link https://www.irs.gov/pub/irs-pdf/p15a.pdf.
|Form I-9||Employment Eligibility Verification|
|Form SS-4||Application for Employer Identification Number|
|Form SS-8||Determination of Worker Status|
|Form W-2||Wage and Tax Statement|
|Form W-2C||Corrected Wage and Tax Statement|
|Form W-3||Transmittal of Wage and Tax Statements|
|Form W-3C||Transmittal of Corrected Wage and Tax Statements|
|Form W-4||Employee’s Withholding Allowance Certificate|
|Form W-4P||Withholding Certificate for Pension or Annuity Payments|
|Form 940||Employer’s Annual Federal Unemployment Tax Return|
|Form 941||Employer’s Quarterly Federal Tax Return|
|Form 941||Schedule B, Employer’s Record of Federal Tax Liability|
|Form 941-X||Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund|
|Form 943||Employer’s Annual Tax Return for Agricultural Employees|
|Form 944||Employer’s Annual Federal Tax Return|
|Form 945||Annual Return of Withheld Federal Income Tax|
|Form 1040ES||Estimated Tax for Individuals|
|Form 1040||Schedule H, Household Employment Taxes|
|Form 1042||Annual Withholding Tax Return for U.S. Source Income of Foreign Persons|
|Form 1099-MISC||Miscellaneous Income|
|Form 1099-R||Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRA, Insurance Contracts|
|Form 1120||U.S. Corporation Income Tax Return|
|Form 4137||Social Security and Medicare Tax on Unreported Tip Income|
|Form 8027||Employer’s Annual Information Return of Tip Income and Allocated Tips|
2. Unrelated Business Tax (UBIT)
3. Property taxes
Step One: determine if your organization engages in unrelated business activities.
Tax exempt non-profit organizations maybe engage in trade or business activities. If these trade or business activities are regularly carried on and are not substantial related to organization’s’ tax-exempt purpose, income produced by these business activities is subject to Unrelated Business Income Tax (UBIT).
Step Two: determine if your organization’s business activities fall into the categories below.
Unrelated business activities include sale of merchandise and publications, advertising, gaming, rental income, parking lots, and debt management plan service.
Step Three: Determine the exceptions
There are some exceptions that not subject to unrelated business income tax.
Step Four: Filing for Unrelated Business Income Tax (UBIT)
If a tax-exempt organization has gross unrelated business income more than $1,000 for any tax year, this exempt organization must file Form 990-T, in addition to the requirement to file Form 990, 990-EZ, 990-N, or 990-PF.
Form 990-T is due the 15th day of the 5th month following the end of the organization’s accounting period (tax year). However, an automatic 6-month extension of time to file can be requested by filing Form 8868.
Failing to pay Unrelated Business Income tax on time will lead to interest and penalty charges by IRS.
Forms can be used to file UBIT
|Form 990-T||Exempt Organization Business Income Tax Return|
|Form 990-W||Estimated Tax on Unrelated Business Taxable Income for Tax-Exempt Organizations|
|Form 1120||U.S. Corporation Income Tax Return|
|Form 8868||Application for Extension of Time to File Exempt Organization
More information can be found in Publication 598, Tax on Unrelated Business Income of Exempt Organizations.
The qualification and application for property tax exemption varies in different states. Here we take the situation in the state of California for instance.
Step 1: Determine the eligibility of property tax exemption”
In State of California, to apply the property tax exemption, a nonprofit organization must qualify the tax-exempt regulations under the Internal Revenue Service 501(c)(3) or California Franchise Tax Board 23701(d).
In addition, to be eligible to apply property tax exemption in State of California, the nonprofit organizations must be organized for one or more following tax exempt purposes: religious, hospital, scientific or charitable. What’s more, the property claimed for tax exemption must be used exclusively for qualified exempt activity.
The property used by other organizations tax exempt organization (under Internal Revenue Code 501(c)(3) or 501(c)(4) or Franchise Tax Board 23701(d)), incidentally for exempt purposes only can be tax exemption.
Step 2: apply for the property tax exemption
Firstly, the nonprofit organizations should submit their formative documents, including 1) current Articles of Incorporation filed with the Secretary of State, 2) tax Letter from Internal Revenue Service or Franchise Tax Board, 3) annual financial statements, 4) documentation supporting exempt activity, to the Board of Equalization. If a nonprofit organization is eligible for property tax exemption, The Board of Equalization will issue an Organizational Clearance Certificate.
Secondly, the organization should apply local county assessor for reviewing their property for qualifying use and issues the exemption.
Step 3: filing
A retroactive filing is available for eligible organizations for up to 4 prior years, and maximum late-filing penalty for retroactive filing is $250 per year, per property
|Claim for Organizational Clearance Certificate||www.boe.ca.gov/proptaxes/pdf/boe277.pdf|
|Claim for Supplemental Clearance Certificate||www.boe.ca.gov/proptaxes/pdf/boe277l1.pdf|
|Assessors’ Handbook: AH267: Welfare, Church and Religious Exemptions||www.boe.ca.gov/proptaxes/pdf/ah267.pdf|
|County assessors and contact Information||www.boe.ca.gov/proptaxes/assessors.htm|
|Irrevocable Dedication and Dissolution language
(Property Tax Rule 143)
|Publication 149 – Property Tax Welfare Exemption||www.boe.ca.gov/proptaxes/pdf/pub149.pdf|
|Welfare Exemption Claim forms and assessor
|BOE-263||Lessors’ Exemption Claim|
|BOE-267-S||Religious Exemption Claim|
|BOE-267-SNT||Religious Exemption Change in Eligibility or Termination Notice|
|BOE-277||Claim for Organizational Clearance Certificate – Welfare Exemption|
|BOE-277-LLC||Claim for Organizational Clearance Certificate – Welfare Exemption – Limited Liability Company|
|BOE-278-OCC||Verification for Continued Eligibility of Organizational Clearance Certificate – Welfare Exemption or Veterans’ Organization Exemption|
|BOE-267||Claim for Welfare Exemption (First Filing)|
|BOE-267-A||Claim for Welfare Exemption (Annual Filing)|
|BOE-267-H||Welfare Exemption Supplemental Affidavit, Housing – Elderly or Handicapped Families|
|BOE-267-L||Welfare Exemption Supplemental Affidavit, Housing – Lower-Income Households|
|BOE-267-R||Welfare Exemption Supplemental Affidavit, Rehabilitation – Living Quarters|
|BOE-277-F1||Welfare or Veterans’ Organization Exemption Organizational Clearance Certificate|
|BOE-277-F2||Welfare or Veterans’ Organization Exemption Organizational Clearance Certificate|
If the intent is to operate non-traditional nonprofit ventures (such as a teacher/demonstration community, village, or hub), transparency to prove your venture(s) as nonprofit is essential. Here we discuss the three foundations for accomplishing this:
Disclosure means transparency about how money is made and how it is spent. In the case of One Community, we will be disclose quarterly/semiannual/annual financial statements online and the proof of all monies going to the development and mission of One Community. Simple stated, if no distribution is made to the shareholders, the total revenue received from visitors (and all other revenue streams) minus the total expense (program service, utility, depreciation, marketing, taxes, etc.) should equal the amount of contribution to One Community. Sharing this information openly will ensure and prove to the public the State Tax Department and Internal Revenue Service that One Community as a teacher/demonstration village and hub is a 501(c)(3) organization which deserves its tax exemptions.
Your business mission should also demonstrate your nonprofit focus and purpose. As an example, One Community’s non-profit mission is transformational global change through designing, modeling, and open sourcing sustainably holistic, virally self-replicating, Highest Good of All solutions. These solutions are founded on comprehensive and modifiable village/city models that can be duplicated globally. Duplication can be accomplished both modularly and/or as complete teacher/demonstration hubs and include sustainable solutions for infrastructure, food, education, economics, fulfilled living, and more.
This mission and our global goals mean we fall under several different 501(c)(3) categories including “Education Organization” and “Low-income Housing Provider.” We are working to demonstrate and provide a living experience that is totally sustainable and educational as an open source model for replication as an environment, eco-tourism resort, low-income housing option. This educational experience, environment, and the buildings and ongoing development process will be hosted by volunteer tutors living on site who maintain the environment, demonstrate how amazing it is to live in it, and share and continuously evolve all aspects of the open source sustainable components and model.
Last but arguable most important is your Financial Reporting. A certified financial statement should include two years audited Balance Sheets and three years audited Income Statements. Below examples show only a one-year format. They illustrate the income statement format for both the for-profit business and the not-for-profit organization.
NFP organizations account for their resource in different “funds,” and each of the funds is a separate accounting entity. This means the record of each fund is separate but there might be transfers between funds. According to the Financial Accounting Standards Board (FASB), NFP must classify the net assets into three categories: Unrestricted, Temporarily Restricted, and Permanently Restricted. The classification of the assets is based on donors’ will, which means the person or corporation who made the contribution will decide the nature of the asset.
Generally, Permanently Restricted net assets are the endowments (income or form of property) with a principal (original sum) that can never be used, but the income from the principal is available for expenditure. Temporarily Restricted net assets are mainly the resources that are to be used for specific purposes in a set period of time. The net assets that do not fall into the two categories are unrestricted net assets.
Contribution of services are the costs that would otherwise occur for the NFP if it is not performed by unpaid volunteers. Two criteria need to be met for a NFP to recognize a contribution of services:
According to FASB, these services are those provided by accountants, carpenters, doctors, electricians, lawyers, nurses, plumbers, teachers, and other professionals. A journal entry for service contribution revenue would look something like this:
|Revenue from contributed services||$xxx|
Though GAAP allows organizations to recognize services revenue if the above two criteria are met, in the real world it is sometimes difficult to justify. Also, individuals cannot deduct the value of their time or services, so organizations should not issue receipts of donations for these services.
For comparison, here are some income and balance statement examples for both for-profit and nonprofit entities. Depending on the nature of your organization, your statements may be simpler or more complex than these examples.
Here is a basic income statement for a for-profit entity:
Here are examples of the Statement of Financial Position and Statement of Activities in a GoogleSpreadsheet you can copy. What should be obvious is that nonprofit statements require a much more detailed level of accounting because of their tax except benefits. That said, remember that each FP business or NFP organization will have differences in financial their reporting depending on the nature of the activities. So the above information is for illustration only, it does not cover all aspects of a business’ or NFP’s operations.
These examples were constructed with the accounts that will likely be used by One Community as an eco-tourism resort. For organizations with other products or services, the accounts needed can be very different. Here are some additional possible accounts for a Statement of Financial Position:
Here are some additional possible accounts for a Statement of Activities:
Again, the above accounts and classifications may vary based on specific organizations. For example, investment income might be within program services (the main function of an NFP organization) for a charity foundation, but supporting services for a hospital or college. It is important that organizations consult with a professional accountant who knows about your organization before setting up these accounts for yourself.
This section will evolve to share the specifics of how we do our accounting for each of the One Community revenue streams. Once we are operating, we will include our actual cost and revenue sheets for all years of operation, open source editable spreadsheets, and any other specifics we feel are helpful or relevant.
When volunteers leave the One Community property, they might want to let One Community manage their house during their leave and earn income from renting it out. When the volunteer (house owner) needs One Community to manage the house during their leave, the house owner will be charged for home maintenance expenses and receive profit when the house is rented out. At the same time, One Community will also earn revenue from providing the management service. We think this will be a win-win situation for both the home owner and One Community.
Here is a tutorial for how to record expenses and revenues in this case.
Note: If the house owner wanted to make further contribution to One Community, then One Community would recognize this as contribution revenue and the donor would (in most circumstances) be able to deduct the amount.
Tourism revenue has been identified as the revenue stream most capable of accomplishing our global transformation goals by further supporting and sharing One Community as a teacher/demonstration community, village, and city. We will use a combination of the visitability of our location, educational classes, and non-stop creation of open source blueprints to market and share this option with the world. Sustainable infrastructure combined with an all volunteer labor force will keep operational expenses low while we share the fulfilled living and enriching environment as a marketable eco-tourism option. This will allow us to offer significantly more value, for a lower price, with an endless and free open source sharing marketing engine that benefits us and the world. In short, the more (and higher quality) our open source sharing, and the more fun our environment is, the more successful we will be; all of which will help to fuel our secondary revenue streams as well.
Q: Is anyone (directors, consultants, etc.) paid as part of One Community?
No, we are a 100% unpaid volunteer organization.
Q: How would individuals who want to make money as part of One Community do so?
Please see our entrepreneurial model page.
Q: Are you basing these concepts on an existing model? In other words, how confident are you they will work?
These concepts are based on the foundations of intelligent business in almost any industry: providing value, low cost to profit ratio, and a quality marketing engine. The successful (and growing) model to compare what we are creating with would be the affordable tourism industry. Affordable tourism continues to gain market share and sustainability as an industry and an interest continue to grow also. Visiting a property like One Community’s, an environment like One Community’s, and hands on experience with all of One Community’s open source blueprints and creations all add to our desirability and marketability. Further add to this that the entire “staff” of One Community are non-profit volunteer residents not doing a “job,” but rather operating the Highest Good society model that is the core of One Community, makes it a fun place to be and visit, and an exciting and world changing organization to maintain.
Combining all these things produces a place people want to visit, that will offer much more interesting and fun things to do, at a lower price, with a higher profit margin, staffed by people who are (instead of “workers”) equal and full shareholders in the experience. On top of this, we are changing the world for the better and the more fun and beautiful residents make One Community, the more they individually benefit, the more visitors benefit, and the more it benefits One Community’s global transformation goals.
For these reasons, we are very confident in the financial viability of One Community.
Q: What about duplicability, how will this be duplicable for others?
The marketing engine of One Community is growing to specifically support and coordinate with other teacher/demonstration communities, villages, and cities too. When other teacher/demonstration hubs contribute to the global open source archive, we will help them promote their work through our engine. We will operate this like a franchise where inclusion is based on open source contributions to positive and permanent global transformation. This means future models will have a significantly easier time implementing this same model. We will are also open source free-sharing the complete for-profit, non-profit, and entrepreneurial models and details of One Community so others will be able to duplicate them with our without association with One Community.
Q: Why do you have a for-profit component, why not be 100% non-profit?
There are two primary reasons for this:
First, in essence One Community is establishing itself to place maximum profits into our non-profit and global goals. However, there are elements of One Community that will not legally fall under the umbrella of a non-profit and these areas will need to be classified and taxed as for-profit ventures operated under a separate legal entity. We also see it as a positive thing for both One Community and Visitors so long as we offer enough value that people feel good about the investment in the for-profit elements of One Community. In this way we hope to demonstrate and spread Highest Good economics as part of our model too.
Second is our goal to demonstrate and open source share a model that is A) sustainable and B) can meet the needs of as many people as possible. In the case of the model being sustainable, we do not consider any model that operates 100% on donations as a sustainable and duplicable solution because donated resources are limited. Revenue is also necessary to purchase everything that cannot be produced effectively internally like machinery, appliances, technology, clothing, some food items, vehicles, etc. These items will differ for different people in different locations and an effective revenue stream addresses this.
In the case of meeting the needs of as many people as possible, One Community is also taking into account those who have debt, those seeking only to invest, and the reality that there will be many who will try a model like this and then change their mind and want to leave and/or do something else. The for-profit element of One Community is purposed to provide duplicable revenue streams that help all three of these group while also helping share and spread teacher/demonstration communities, villages, and cities by demonstrating them as a progressive and profitable opportunity.
Q: If you are a team of people without debt, how do you intend to teach people with debt how to become free of debt?
Our goal is to clearly define as many of the variables as possible for creating a financially viable teacher/demonstration hub with a diversity of options for implementation to suit different demographics and budgets. The more One Community grows and expands, the more open source blueprints, tools, tutorials, and resources we will provide for others to duplicate our efforts. This is why we are focused on people joining the Pioneer Team that are financially stable, so we can focus 100% of our energy on open source creation for those that aren’t in such a fortunate position. This is also one of the reasons why we won’t move onto the property with any debt as an organization.
Q: If you are a non-profit organization, how do you intend to operate for-profit businesses too?
Any activities of One Community deemed by tax code and federal law to not be operable under our 501(c)3 status will be operated under a separate for-profit corporate entity.
Q: Will One Community ever pay any of its members?
One Community’s #1 financial priority is expansion and our global goals. If we are accomplishing expansion and these goals successfully, and a 100% consensus of the membership agrees that distribution of funds is warranted and will not in any way compromise these goals, then distributions can be made.
Q: What about property liability and ownership by individuals versus a foundation, corporation, etc.?
Premise Liability: (click here for a resource about this)
The property owners or non-owner residents, are responsible for maintaining a relatively safe environment. When people enter the property and hurt themselves because the environment is not safe, they may sue the property owners or residents unless they are intoxicated or are trespasser. The residents are treated in the same manner as the property owner.
Insurance on premise liability:
Business owner policy includes property coverage and general liability coverage.
Property: Building, officer contents
General liability: Property damage or bodily injury suffered by a third party (not owned or employed by the business) accidentally caused by normal business operation.
If the owner also occupies the property, the owner can insure the office building and the office contents of the building on the same policy; most insurance companies can only insure the office contents in a leased space.
If the property manager is an employee of the property owner, the owner usually will continue to be liable for the injuries caused by negligence because employers are responsible for the action of their employees and agents.
How to identify whose responsibility:
The ownership form does not increase or decrease the total amount of liabilities taken by the owner or the manager, but it does influence the insurance coverage of the property. Only when the manager is also the owner of the property, can they insure the building and the office contents, otherwise the manager can only insure the office contents.