Elementum

Venture Legal and Tax Structure Guide.

Settle, with professionals, whether the venture sits inside the organization or needs a separate structure, and understand its tax treatment before you launch, because a structure mistake can cost your tax-exempt standing.

The fourth step of design and launch. This is not a worksheet decision; it requires a nonprofit accountant and attorney.

Part A. The questions for the professionals

Is the venture income related to our mission, or unrelated and therefore possibly taxable as unrelated business income?

Is it large enough relative to us to raise a question about our tax-exempt standing?

Should it sit inside the organization, or in a separate legal entity such as a subsidiary?

Part B. The professional check, required

A nonprofit accountant and attorney have advised on the structure and the tax treatment (yes / no)

Do not launch a venture of real size until this is yes. The compliance of it lives in compliance, legal and risk.

Part C. The board decision

Board authorized the chosen structure on (date)

If the answer is a full spin-off into a separate organization, route to mergers, partnerships and restructuring.

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Back to Design and Launch the Venture, or start over from the welcome page.