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How do you merge a non-profit organization with a Corporation?
I'm not a lawyer, but the merger and acquisitions process for nonprofits is similar for commercial ventures. Many nonprofits are corporations, and use mergers and acquisitions to survive financial hardships or to increase scope, reach, etc. I would believe the biggest component of a nonprofit merging with a for-profit would be the determination of tax status. Will the for-profit become a nonprofit, the nonprofit a for-profit, or will the process act like an add-on with a for-profit arm of the nonprofit or a nonprofit arm of the for-profit. Most of this is about taxes, compliance laws, and lots of paperwork. What I can say, is if the nonprofit is looking to keep their nonprofit status, the acquisition shouldn't significantly alter their original charter. Expanding reach, scope, and capacity is one thing, changing your qualifying areas reinitiates the review process. In general, the basic things required in a nonprofit merger or acquisition can be quickly read in this PDF, Merging Nonprofit Organizations.the Art & Science of the Deal. So after all the details of will we become a nonprofit or a for-profit is hashed out, then either the nonprofit or the for-profit is dissolved, assets merged and or transferred. Then after you think you've gone through the hard part, you hit the hard partâmerging two different corporate cultures. ..... UPDATE.Also, there may be state laws to comply with. This is a link to a New York state law regarding nonprofit and corporate mergers
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The link above goes to an informational page of the legislation. From the PDF: § 716. Definitions The following definitions are applicable to this chapter: 1. “Affiliated corporation” means a corporation (other than a corporation which is affiliated with another corporation) controlled or conducted by two or more persons through a common entity. 2. “Advisory committee” means the non-profit board of trustees of any public or private nonprofit corporation that is or has been chartered to carry out the purposes for which it is chartered or by one or more of its members. 3. “Affiliated member corporation” means a member corporation with its managing entity affiliated with a nonprofit that is a controlled nonprofit entity under section 720. 4. “Associated nonprofit” means a nonprofit corporation, affiliated with a nonprofit entity or any member of any nonprofit entity, that has or has had a controlling role in such nonprofit entity or member corporation. 5. “Affiliated.
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