Should a group register as a non-profit or a coop
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Should a group register as a non-profit or a coop
Several individuals have started a group that is of a networking nature. We will charge vendors for events and eventually membership. The money collected will go back into the group for operating costs. We are unsure of the tax ramifications and how we should register ourselves.
Asked on October 2, 2017 under Business Law, Texas
Answers:
B.H.F., Member, Texas State Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
Based on what you describe, I would suggest that you form a non-profit corporation. This does two things for you: It protects the members from individual liability and it also reduces tax liabilities for any funds collected.
If you intend to share profits, then you will have to form a for-profit corporation. The ultimate decision depends on whether or not the people who are forming this intend to make money....or to simply use it as a way to help others.
Before you make a final decision, I do suggest that you visit with a tax accountant and with a business attorney to review any other advantages or disadvantages of either type of corporation.
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