Can I be a for-profit business but have a non-profit corporation collect donations for our customers?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Can I be a for-profit business but have a non-profit corporation collect donations for our customers?
I have a website where users ask for money. One service I offer allows users to pay me to contact businesses on their behalf to help attract donors. The main business is for-profit however most businesses do not want to donate without the deduction. Can I create two corporations, a for-profit, and a non-profit. The for profit would earn on the users, the non-profit would allow donors to send the money to the non-profit, allow me to send 100% of the money to the user, and the donor gets a nice write-off. Is this set up allowed?
Asked on July 29, 2012 under Business Law, Iowa
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
You personally cannot be a tax exempt business. You need to create a corporation and qualify under Internal Revenue Service guidelines to be a tax exempt corporation for starts.
Under the business scenario you have discussed you can have one tax exempt charitable corporation and the other a for profit corporation. It is important to keep the entities separate and distinct, no commingling of matters and assets.
I suggest that you have a business attorney assist you further in structuring what you want to achieve.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.