"Pete" wrote:

- quote -

You will need to incorporate anew, and for IRS approval,
possibly not in Delaware if you don't live there. See also
IRS Pub 557 and Form 1023, describing the various exempt
purposes. What will this org do? If it will exist only in
cyberspace, it would seem to X out a civic league or social
club, or most of the allowable categories for that matter.

Reg,
Fred F.

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"Pete" <petemccarthy[at]gmail.com> wrote:

- quote -

You could just not make a profit. Do you me that it should
be a "not for Profit" organization. If it is to be a "not
for profit" organization, then your chaarter and bylaws must
say so. It must also be for qualified purposes and specified
how assets are to be distributed to other "not for profits"
or for those qualified purposes. You cannot take such assets
at your discretion for yourself else you would be violating
your fiduciary duty. This is, of couse, a vary simple
explanation and details get complicated.

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Pete wrote:

- quote -

I expect you didn't do your homework.

And you haven't told us what kind of "web based service"
you're talking about. Is it a commercial venture? Or a
true non profit endeavor?

I "suspect" the former. tell me I'm wrong?

ChEAr$,
Harlan Lunsford, EA n LA

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Pete wrote:

- quote -

Well, it depends on what you want. If you just want it to
be a nonprofit for corporation law purposes, you can
probably reincorporate or do an F reorg into a corporation
organized under Delaware's not-for-profit statute.
Generally, what that means is that the articles of
incorporation and bylaws provide that when the corporation
is dissolved, its net assets will not inure to the benefit
of any individual, but will be contributed to a qualified
charity.

However, if you want it also to be tax exempt, you will have
to apply to the IRS (and probably also to your state) for
that status. How difficult that is depends on what the
corporation is planning to do, which will determine the
subsection of IRC Sec. 501(c) that you are applying for.
Assuming that the purposes of the corporation are
charitable, educational, or religious, or that it qualifies
for tax exemption under some other subsection, you can
probably get the tax exempt status approved retroactively to
the inception of the corporation. The exemption application
is a fairly complex process and professional help would be a
good idea.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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"Pete" <petemccarthy[at]gmail.com> wrote:

- quote -

If you want a nonprofit corporation, you should start all
over. The articles are different, the bylaws are different.
And you probably need to get nonprofit status approved both
by the IRS and the state of incorporation. Even if granted,
as a small business you're not likely to save much if any
tax.

Remember also that when there is a nonprofit corporation,
you are no longer the owner. The state is the "owner" and
you have to run the business in what they consider to be a
commercially reasonable manner.

Consider an S-corp.

Stu

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I formed a C-corp last year to launch a new web based
service. I am still pre-launch and am considering changing
to a non-profit. Is this a difficult process. I am
incorporated in Delaware.

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