R600-3-2. Definitions

A. An "active manager" is one who directs or causes the direction of the management and policies of the unincorporated entity, whether through the ownership of voting shares, by contract, or otherwise. Status as an active manager requires a documented history of voting on, approving, or otherwise deciding a substantial matter involving the business of the unincorporated entity, including without limitation:

1. Authorizing a member or any other person to do any act on behalf of the company that is not in the ordinary course of the company's business or business of the kind carried on by the company;

2. Making a distribution to members;

3. Resolving a dispute connected with the company's business;

4. Making a substantial change in the business purpose of the unincorporated entity;

5. Authorizing the unincorporated entity to acquire or merge with another entity; or

6. Authorizing a sale, lease, exchange or other disposition of a substantial asset of the unincorporated entity, other than in the usual and regular course of the business.

B. "Directly holds at least an 8% ownership interest" means that the individual owns in his or her individual capacity at least 8% of the stock, capital, or equity of the unincorporated entity, or is entitled to at least 8% of the unincorporated entity's profits. C. "Indirectly holds at least an 8% ownership interest" means that the individual's total aggregate ownership interest from all sources, including a corporation, partnership, estate, trust or some other form of beneficial interest, totals at least 8% of the unincorporated entity's stock, capital, equity, or profits.

1. For example, if an individual owns 50% of company A which in turns owns 20% of the subject unincorporated entity, then the individual holds a 10% indirect ownership interest in the unincorporated entity.

D. "Subject to supervision or control in the performance of work" means that:

1. The unincorporated entity has the right to control what the worker does and how he or she does it, regardless of whether the unincorporated entity actually exercises that authority; or

2. The unincorporated entity has the right to control the business aspects of the work, such as:

a. How the worker is paid;

b. Whether expenses are reimbursed;

c. Who is responsible to provide tools and supplies;

d. Who arranges for administrative support, advertising, and similar functions.