Consequences of Recharacterization Clause Samples

The "Consequences of Recharacterization" clause defines what happens if a transaction or arrangement is legally reclassified as something different than originally intended. For example, if a loan is recharacterized as an equity investment, this clause would outline the resulting changes in rights, obligations, or tax treatment for the parties involved. Its core function is to preemptively address the risks and uncertainties that arise from such legal reclassification, ensuring that all parties understand the implications and are protected from unintended consequences.
Consequences of Recharacterization. (a) Should City, in its discretion, or a relevant taxing authority such as the Internal Revenue Service or the State Employment Development Division, or both, determine that Grantee is an employee for purposes of collection of any employment taxes, the amounts payable under this Agreement shall be reduced by amounts equal to both the employee and employer portions of the tax due (and offsetting any credits for amounts already paid by Grantee which can be applied against this liability). City shall subsequently forward such amounts to the relevant taxing authority. (b) Should a relevant taxing authority determine a liability for past services performed by Grantee for City, upon notification of such fact by City, Grantee shall promptly remit such amount due or arrange with City to have the amount due withheld from future payments to Grantee under this Agreement (again, offsetting any amounts already paid by Grantee which can be applied as a credit against such liability). (c) A determination of employment status pursuant to either subsection (a) or (b) of this
View SourceView Similar (52)
Consequences of Recharacterization. (a) Should City, in its discretion, or a relevant taxing authority such as the Internal Revenue Service or the State Employment Development Division, or both, determine that Grantee is an employee for purposes of collection of any employment taxes, the amounts payable under this Agreement shall be reduced by amounts equal to both the employee and employer portions of the tax due (and offsetting any credits for amounts already paid by Grantee which can be applied against this liability). City shall subsequently forward such amounts to the relevant taxing authority. (b) Should a relevant taxing authority determine a liability for past services performed by Grantee for City, upon notification of such fact by City, Grantee shall promptly remit such amount due or arrange with City to have the amount due withheld from future payments to Grantee under this Agreement (again, offsetting any amounts already paid by Grantee which can be applied as a credit against such liability). (c) A determination of employment status pursuant to either subsection (a) or (b) of this Section 14.3 shall be solely for the purposes of the particular tax in question, and for all other purposes of this Agreement, Grantee shall not be considered an employee of City. Notwithstanding the foregoing, if any court, arbitrator, or administrative authority determine that Grantee is an employee for any other purpose, ▇▇▇▇▇▇▇ agrees to a reduction in City's financial liability hereunder such that the aggregate amount of Grant Funds under this Agreement does not exceed what would have been the amount of such Grant Funds had the court, arbitrator, or administrative authority had not determined that Grantee was an employee.
View SourceView Similar (26)
Consequences of Recharacterization. Section 6.8 Ownership of Results This Article 17 Miscellaneous Article 7 Taxes
View Source
Consequences of Recharacterization. (a) Should County, in its discretion, or a relevant taxing authority such as the Internal Revenue Service or the State Employment Development Division, or both, determine that Operator is an employee for purposes of collection of any employment taxes, the amounts payable under this Agreement shall be reduced by amounts equal to both the employee and employer portions of the tax due (and offsetting any credits for amounts already paid by Operator which can be applied against this liability). County shall subsequently forward such amounts to the relevant taxing authority. (b) Should a relevant taxing authority determine a liability for past services performed by Operator for County, upon notification of such fact by County, Operator shall promptly remit such amount due or arrange with County to have the amount due withheld from future payments to Operator under this Agreement (again, offsetting any amounts already paid by Operator which can be applied as a credit against such liability). (c) A determination of employment status pursuant to either subsection (a) or (b) of this Section shall be solely for the purposes of the particular tax in question, and for all other purposes of this Agreement, Operator shall not be considered an employee of County. Notwithstanding the foregoing, if any court, arbitrator, or administrative authority determine that Operator is an employee for any other purpose, Operator agrees to a reduction in County's financial liability hereunder such that the aggregate amount of Operations Funds under this Agreement does not exceed what would have been the amount of such Operations Funds had the court, arbitrator, or administrative authority had not determined that Operator was an employee.
View Source
Consequences of Recharacterization. Article 17
View SourceView Similar (4)

Related to Consequences of Recharacterization

  • Consequences of Breach Without prejudice to any rights that may be available to the Principal/Owner under law or the Contract or its established policies and laid down procedures, the Principal/Owner shall have the following rights in case of breach of this Integrity Pact by the Tenderer(s)/Contractor(s) and the Tenderer/ Contractor accepts and undertakes to respect and uphold the Principal/Owner’s absolute right: 1) If the Tenderer(s)/Contractor(s), either before award or during execution of Contract has committed a transgression through a violation of Article 2 above or in any other form, such as to put his reliability or credibility in question, the Principal/Owner after giving 14 days notice to the contractor shall have powers to disqualify the Tenderer(s)/ Contractor(s) from the Tender process or INTEGRITYPACT terminate/determine the Contract, if already executed or exclude the Tenderer/Contractor from future contract award processes. The imposition and duration of the exclusion will be determined by the severity of transgression and determined by the Principal/Owner. Such exclusion may be forever or for a limited period as decided by the Principal/Owner. 2) Forfeiture of EMD/Performance Guarantee/Security Deposit: If the Principal/Owner has disqualified the Tenderer(s) from the Tender process prior to the award of the Contract or terminated/determined the Contract or has accrued the right to terminate/determine the Contract according to Article 3(1), the Principal/Owner apart from exercising any legal rights that may have accrued to the Principal/Owner, may in its considered opinion forfeit the entire amount of ▇▇▇▇▇▇▇ Money Deposit, Performance Guarantee and Security Deposit of the Tenderer/Contractor.