Information Release About CASLI
We are delighted to share with you news of an exciting new development. RID has formed the Center for the Assessment of Sign Language Interpretation, LLC (CASLI) to advance RID’s mission. CASLI is a Virginia limited liability company that is solely owned and controlled by RID. CASLI was formed in Virginia because RID’s offices are located in Virginia, which allows CASLI to benefit from certain costs efficiencies. CASLI will be housed in RID’s office at 333 Commerce Street, Alexandria, Virginia 22314.
The formation of CASLI provides three significant benefits. First, it provides RID with a business structure that allows for the efficient and autonomous development and administration of knowledge and performance exams. These exams will be relied upon as part of the certification criteria established and conferred by RID.
Second, it isolates any potential liability associated with the development and administration of knowledge and performance tests from RID. CASLI is a separate legal entity from RID, which means RID is not liable for CASLI’s liabilities and vice versa. This is accomplished without changing RID’s current income tax structure. Although CASLI is a separate entity for legal purposes, it is not treated as a separate entity for income tax purposes. Rather, CASLI is treated as a division of RID as long as RID is the sole owner. RID is exempt from Federal income tax (as well as State income tax) under Section 501(a) of the Internal Revenue Code as an organization described in Section 501(c)(3). Because CASLI is treated as a division of RID, its income is also tax exempt.
The third significant benefit is that CASLI provides the flexibility to have other organizations interested in providing sign language interpretation for the deaf to team up with RID by investing in and becoming a member of CASLI. This could expand RID’s reach while providing funding for current and future programs. If other organizations join, CASLI would no longer be treated as a division of RID for income tax purposes, but would become a partnership. Partnerships do not pay income tax. Rather, the income is allocated among the partners. RID’s allocable share of CASLI’s income would continue to be tax exempt (subject to the unrelated business income tax (UBIT) rules).
CASLI will be governed by a Board of Managers, which will be appointed by the RID Board of Directors. The Board of Managers will run the day-to-day operations of CASLI, but significant decisions, such as the admission of a new member, will require the approval of the RID Board of Directors. While a new member might be entitled to vote, it is expected that RID will retain voting control for the foreseeable future. Moreover, no entity will be admitted as a member if such new member could jeopardize RID’s tax-exempt status, and voting control must remain with Section 501(c)(3) organizations. Thus, if RID did decide to admit another entity with whom it would share voting control, that entity would have to be a Section 501(c)(3) organization. This creates the possibility of an entity that is not a Section 501(c)(3) organization to be a member, but such entity would either have no vote or a minority vote.
In addition to CASLI’s Articles of Organization, which create it as a separate legal entity, two other legal documents control the governance and operations of CASLI – an Operating Agreement and a Memorandum of Understanding (MOU) between RID and CASLI. The Operating Agreement functions like Bylaws.
The more important items addressed by the Operating Agreement are:
- It provides for the management of CASLI (g., establishes the Board of Managers, the process for appointing and removing Managers, and the scope of the Board’s authority, including those actions that cannot be taken without the consent of the member(s);
- It includes a Conflicts of Interest Policy for its Managers, Officers, and employees;
- It governs the admission of new members;
- It provides of the allocation of income among the members (if and when there are members in addition to RID);
- It provides for the distribution of cash (if any) to the members; and
- It establishes the procedures for dissolving CASLI.
The Conflicts of Interest Policy is designed to ensure that the Managers, Officers, and employees exercise the utmost good faith in all transactions touching upon their duties to CASLI and its property. In their dealings with and on behalf of CASLI, they are held to a strict rule of honest and sincere dealing among themselves and CASLI. They shall not use their positions, or knowledge gained therefrom, so that a conflict might arise between CASLI’s interest and that of the Manager, Officer, or employee.
The MOU establishes the understanding between RID and CASLI on the significant aspects of the transition of the development and administration of knowledge and performance exams from RID to CASLI. The more important items it addresses are:
- implementation of testing of interpreter competence;
- financial arrangement between RID and CASLI;
- licensing of intellectual property from RID to CASLI;
- test pricing;
- eligibility requirements for test candidates;
- availability of test study materials;
- CASLI branding; and
- establishment of the Testing Committee.
The transition of knowledge and performance exams from RID to CASLI will commence July 1, 2016. It is expected that CASLI will be fully operational shortly thereafter.
Any questions regarding the formation of CASLI should be directed to firstname.lastname@example.org, or 571-527-1463 (voice) or 571-257-4671 (VP).