How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Dimitry K., Esq. Your Own Question
Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 41221
Experience:  Run my own successful business/contract law practice.
18572087
Type Your Business Law Question Here...
Dimitry K., Esq. is online now
A new question is answered every 9 seconds

Hi. I currently own a LLC theater group but want to start

Resolved Question:

Hi.

I currently own a LLC theater group but want to start a non-profit theater group in California, but I have a few questions.

1. I know there are lots of types of non-profits. My basic goal is to run the company myself and be able to fundraise and put on shows with no financial benefit to myself. Who in essence runs the non-profit/who is in charge? Is there a way to not have a board of director?. Is that what a private non-profit is? Basically, I want to be able to run the company myself and not lose the company to the will of a board. If this is not possible, is there a way that the by-laws can be made to keep me in charge? Please advise.

Thanks
Ben
Submitted: 7 years ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 7 years ago.
Thank you for your question.

Hmm, what you are trying to set up can be done, but it will take very serious tweaking of the Articles of Incorporation--that is because in essence a "non-profit" is not owned by you but by everyone--you are merely the custodian.

1. I know there are lots of types of non-profits. My basic goal is to run the company myself and be able to fundraise and put on shows with no financial benefit to myself. Who in essence runs the non-profit/who is in charge?
The Board in essence runs the non-profit, and they are the ones that end up putting up the officers who run the non-profit.

Is there a way to not have a board of director?
Yes, but then it is no longer a non-profit. You can simply create an LLP without a board, run it yourself, and take all the profits you make into whatever you wish--but you will not be tax exempt.

Is that what a private non-profit is?
No, a non-profit is a 501(c)(3) IRS certified entity, which makes the entity actually "non-profit". If a company does not have designation, it is not deemed a non-profit.

Basically, I want to be able to run the company myself and not lose the company to the will of a board. If this is not possible, is there a way that the by-laws can be made to keep me in charge?
Not in a pure non-profit. Ultimately the board can (and has) removed original creators from actually running the non-profit.

Hope that helps.

Edited by Dimitry Alexander Kaplun on 10/1/2010 at 4:40 AM EST
Customer: replied 7 years ago.
So basically there is no way to run a group (non-profit, for profit, etc) and be able to fundraise?
Expert:  Dimitry K., Esq. replied 7 years ago.
Thank you for your patience.

No, you can still fundraise, you just have to be careful as the IRS has gotten extremely serious and careful over any entity that gains $25,000 or more from donations. For that, once you properly incorporate, you would have to also file a 990 or a 990-EZ form in which all the assets are properly disclosed.


Edited by Dimitry Alexander Kaplun on 10/1/2010 at 5:02 AM EST
Customer: replied 7 years ago.
I'm sorry im still not understanding. Is there, or is there not a way for me to be totally 100% in charge of a group (wanting to do shows for children) and still fundraise? If so, is the fundraising tax deductible for the doners?

Basically, I have no interest in making money for myself. I want to be able to do shows (through fundraising) out of this legal entiry. I am providing a public serive, with me in 100% control, putting on shows to kids. Is this possible and what sort of legal entity would this fall under?
Expert:  Dimitry K., Esq. replied 7 years ago.
I'm sorry im still not understanding. Is there, or is there not a way for me to be totally 100% in charge of a group (wanting to do shows for children) and still fundraise? If so, is the fundraising tax deductible for the doners?
To that the answer is NO. You cannot be 100% in charge and still fundraise.

Basically, I have no interest in making money for myself. I want to be able to do shows (through fundraising) out of this legal entiry. I am providing a public serive, with me in 100% control, putting on shows to kids. Is this possible and what sort of legal entity would this fall under?
You CAN create a "for-profit" entity that does what you wish it to do--that is, put the profit towards making shows, and permits you stay in 100% control, but you would then not be able to fundraise personally for it.

I am sorry.

Edited by Dimitry Alexander Kaplun on 10/1/2010 at 5:44 AM EST
Dimitry K., Esq. and 4 other Business Law Specialists are ready to help you