Can I set up a non-profit organization within an existing S corp?
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Can I set up a non-profit organization within an existing S corp?
I am the senior VP of a S corp. I was approached by a friend to help raise money for lung cancer research. The mission is to create a motorcycle poker run nation wide to raise monies for lung cancer research. Guess what I need to know is: can we do this within my existing S corp. or do we need to set up another corporation as non-profit?
Asked on September 26, 2010 under Business Law, Florida
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
No you need to set up a new corporation as a Not for Profit (or 501(c) Corporation). The corporation types are different as to how they handle profits and I am assuming that you have been using the S corp for a profit making venture of your own. In an S corp owners pass through the profits and losses, deductions, etc., to the corporation owners. A Not for Profit corporation keeps their profits for future use for themselves. It would be best for you too to remain above board and above reproach by others, especially with such an emotionally charged subject matter. If things go awry people will eant to point fingers. It is admirable. Good luck with everything.
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