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I have an LLC in CA that I am considering converting to a non-profit.

My LLC is a small...
I have an LLC in CA that I am considering converting to a non-profit. My LLC is a small film company dedicated to creating inspiring, educational content. I work closely with another non-profit dance company and plan to create projects that highlight women's issues, Dancing through Parkinsons, Stroke recovery, etc.
I believe, because of the work I do, that I would be in line for grants and well as charitable donations.
How difficult and how expensive is it to proceed that idea and convert from and LLC to a non-profit?
Thank you for your time.
Best,
Elizabeth Gracen
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Answered in 18 minutes by:
12/8/2014
J. Warren
J. Warren, Attorney
Category: Business Law
Satisfied Customers: 2,250
Experience: Experience in general business transaction and formation matters.
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Hello! My name is ***** ***** I look forward to helping you today.
It is not difficult to convert to a non-profit but it is technical and requires the proper State and IRS filings to create a non-profit. Here is a general outline provided by Small Business Magazine that my clients have found helpful:
http://smallbusiness.chron.com/difference-between-nonprofit-organization-llc-746.html
In general the IRS will not grant a single member LLC owned by an individual tax exempt status. Therefore, it is likely required to convert an LLC to a Corporation. Again, this may be accomplished but it is a technical endeavor.
The initial filings and on going compliance such as the business operation needing to be ancillary to your business is essential and I would recommend using a local business attorney that routinely assists non-profit organizations. Once the non-profit is given its non-profit status by the State and IRS it is key to not lose the status as all the benefits of a non-profit will be terminated and be subject to penalty and potential tax liability.
I would budget a $1800 to $4000 to properly retain local counsel to complete all necessary forms and to provide assurance a non-profit has been set up appropriate in order to be grant exempt status. Here is a link to the California State Bar Lawyer Referral service that can provide you contact information of a non-profit business lawyer: www.calbar.ca.gov/Public/LawyerReferralServicesLRS.aspx
All my best & encouragement.
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All states have intricacies in their laws and any information given is simply information only and specifically is not intended to be, nor does it constitute, legal advice. This communication does not establish an attorney-client relationship with you.
J. Warren
J. Warren, Attorney
Category: Business Law
Satisfied Customers: 2,250
Experience: Experience in general business transaction and formation matters.
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