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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 118286
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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Children and Youth First is a non-profit organization registered

Customer Question

Children and Youth First is a non-profit organization registered in Nepal. We would like to register a branch organization in US so that we can use that to collect donations via paypal which does not recognize the Nepal non-profits. Based on my previous questions, here is what i can do, is this right?

1) Form a new non-profit organization here called "Children And Youth First" in the US using services from www.legalzoom.com

2) Make ammendment to the article of incorporation with rules that state that " Full control will be maintained by the "Children And Youth First" organization in Nepal which will act as the parent organization, and its board members. All decisions need to be concented by the parent organization. " (similar verbiage) (Will doing this give all control to the parent organization in Nepal? Is this how we can setup a branch organization here in USA?

3) File for tax exempt status

4) Collect online donations using the new 501(c)(3) using paypal, etc

5) Send the money from the US bank a/c to the "Children and Youth first" headquater in Nepal Are we on the right track? Do you see any issues with these steps? our site: http://www.cyfnepal.org

I had posted this question before and the response i got was that i should from a non-profit LLC. Can you tell me how that is different from normal Non-profit incorporation? Please view my previous questions for more background.
Submitted: 6 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 6 years ago.
1) Yes, you would have to form a US non-profit with the Nepal group as the parent owner of the US non-profit.

2) In the articles, you make the parent group the controlling member of the non-profit and you would then put the wording you suggest about the parent being sole decision maker for the organization.

3) You file for tax exempt status through the IRS, proving your charitable purpose.

There really is no difference from forming a regular US non-profit, BUT where this becomes sticky is you need to follow US rules on sending money out of the country, which means you have to make the declarations to Homeland Security and IRS about the money being sent to the non-profit in Nepal and this is something your accountant handles for the organization, but it is done all the time and it is merely a reporting measure.


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Customer: replied 6 years ago.
Is it better to form regular non-profit corporation or a LLC?

How do i make the nepal branch the parent company? Via wordings in the articles of incorporation? or is there a specif field or forms for this?
Expert:  Law Educator, Esq. replied 6 years ago.
Yes, generally all of these non-profits are LLC's because they are easier to manage. When you register the LLC you make them a member of the LLC. Of course, in setting up an LLC you really should not be doing this without an attorney when dealing with a non-profit because if you make any errors it can delay the non-profit status and it is economically better to have the attorney get all of the documents drafted properly including the operating/membership agreements which is where all of the details regarding the parent company's rights and powers would be detailed.