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-   -   A question about to be an LLC or Non Profit (http://board.crossfit.com/showthread.php?t=59392)

John Swanson 07-05-2010 09:09 PM

A question about to be an LLC or Non Profit
 
So I have started a Co. called FAST. We are currently an LLC but I'm looking into switching to a non profit. My ultimate goal is to have a training facility that can be very cost effective for families. I want to work will kids all the way up to parents. My parents program would be a Crossfit gym while the PE Program and up would teach kids how to move and slowly add strength training.

My question is should I switch to a non profit. Next year I plan to create a FAST Foundation, which will cover the expense for a few athlete who's parents can't afford the pay for them to train. This program would also help get the kids equipped with proper shoes shorts ect. I feel that if I stay as an LLC companies wont want to donate to the cause because of me being an LLC. Also if your a non profit you get very good tax breaks on building and would have a better chance with getting companies to sponsor us with Supplements, Apparel, Equipment and so on....

I would love to hear anyones advice.:thanx:

Katherine Derbyshire 07-05-2010 10:37 PM

Re: A question about to be an LLC or Non Profit
 
Talk to an accountant, preferably one specializing in non-profits. They have lots of tax breaks, but also lots of special rules.

Katherine

Alexander Martin 07-08-2010 06:29 PM

Re: A question about to be an LLC or Non Profit
 
I have looked into starting a Non-Profit before, actually something kind of like what you are doing. I still think about doing it but the Not for Profit process is very long with lots of paper work and hoops to jump through. I think talking to a specialist in Non-Profits is a great idea as it will help guide you along in the process. Nolo Press is a good reference for yourself as it gives the process by which you have to take to get the Not for Profit label/tax exemption.

Gregory L. Johnson 07-08-2010 07:51 PM

Re: A question about to be an LLC or Non Profit
 
I second Nolo press. I worked as an accountant for a couple of non-profits and they used their book and forms to get up and running. I used it as reference when I handle some of the administrative tasks. There is a lot of free information on the site to help decide which way you want to go.

John Seiler 07-08-2010 11:29 PM

Re: A question about to be an LLC or Non Profit
 
Quote:

Originally Posted by Katherine Derbyshire (Post 806803)
Talk to an accountant, preferably one specializing in non-profits. They have lots of tax breaks, but also lots of special rules.

Katherine

:yeahthat:

Jeremy R Johnson 07-15-2010 10:25 PM

Re: A question about to be an LLC or Non Profit
 
I just completed a Master's Degree in Public Administration, which had a heavy dose of non-profit admin. Many programs like this exist and are often looking for real-world projects. Hit up the MPA program of your local university.

There is much more to creating and running a non-profit than getting the tax-free status. Start considering now who will be on the board, drawing up by-laws, etc.

There are a number of good books on Non-profit Management. Familiarize yourself with them, especially if you are going to run a foundation and a business. They have a lot in common, but some substantial differences you need to be ready for. Just like starting your business, the better prepared you are, the better the foundation will run. Good luck!

Justin McCallon 07-28-2010 01:33 PM

Re: A question about to be an LLC or Non Profit
 
A few of the folks at my law firm created non-profits while I was there over the summer.

It seems like a very drawn out and awful process with tons of paperwork, but if you hire someone that has done it several times before, it's really not that bad.

A law firm will probably be a bit more expensive, but they'll be able to do everything for you (bylaws, articles, etc.) and overall I'd guess charge about the same price. This isn't something complex for someone that has done it before. (I'd offer to do it for free, but a Non-Profit Corporation was the one entity I never created)


Whether or not a non-profit is the entity that you really want to make is perhaps more debatable. With an LLC you can take distributions (for you, individually) and pay only the capital gains rate in taxes, whereas with a non-profit you'll need to work entirely off salary. If all you care about is the business and you plan to take very little out of it (as a % of what you make), then perhaps a non-profit is a good idea. You may also want to look into an S-Corporation.


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