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What is the best corporate structure for a for-profit spinoff from a non-profit that is going to be wholly owned by the non-profit?


William Mazer
Title: CFO
Company: Episcopal Children's Services
(CFO, Episcopal Children's Services) |

Depending on what your objectives are, you can really get into the high weeds with esoteric things like a Foundation controlling both entities. But for basic simplicity, a standard C corp makes a lot of sense. Talk with a good tax attorney on the intercompany issues (e.g., debt, interest, capital structure, contribution limits, accumulated net income of for-profit sub, allocated costs, etc.).

Diane McAllister
Title: Partner
Company: Brown Welch McAllister, LLP
(Partner, Brown Welch McAllister, LLP) |

You may want to consider a single member LLC. We set one up for a Real Estate Venture where the single member was the Foundation. The LLC provided the legal security for the Foundation and the profit (loss) flows to the member is a single member entity. Just a thought.

David Ziska
Title: CEO
Company: Council Business Solutions
(CEO, Council Business Solutions) |

I did a single member LLC with the non-profit as the single member. The LLC provides accounting and HR services to ministries and other non-profits.


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