Quote:
Originally Posted by pilotbob
Also, just because your not for profit doesn't mean you can't sell for more than your costs to have some operating assets. Once your there it might be easier to get lines of credits, better merchant account deals, etc. Doesn't non-profit only mean that you roll 100% of the money back into the company?
|
Sort of. Non-profit status doesn't mean you can't
make money. It simply places restrictions on what you can
do with the money you make. You can have paid staff, for example, and even have large amounts of cash on hand. (An example is the San Diego ComicCon, which has paid staffers, and sometimes has a million dollars in the bank with nary a peep from the IRS.) What you
can't do is distribute profits to shareholders.
I'm involved with (though not currently a corporate member of) a couple of 501(c)(3) non-profit entities. They do their best to make money, but the money left oevr after paying corporate expenses gets disbursed to various charitable causes.
Non-profit incorporation is a legal means of seperating the operation from the folks running it, and protecting those involved. Mind you, that protection is not ironclad: play fast and loose enough, and a court can choose to "pierce the corporate veil", and go after the individuals named in the incorporation papers.
______
Dennis