Help me rejigger my businesses

August 2, 2019 7:47 AM

How do I transfer ownership of a US company to a US non-profit?

I own a very small company which is a community website. I also run a very small non-profit which could run this website (i.e. it's well within its mission, has the proper structure etc). The business makes enough money to cover its own expenses (people pay a small fee to join, we have no advertising) but no one gets paid except the guy who does our taxes. I have all the relevant people lined up to help me (boards, lawyer, tax person, etc.) but I'm not sure how the process works exactly. Do I sell the company to the non-profit? Do I dissolve the company and let the non-profit take over the "assets"? Does it matter what state any of this is in? What should I look out for?

Asking here first so that I can minimize lawyer fees for the actual work that needs doing. I've done basic Googling. Any resources people could point me towards would be welcome. Happy to answer any questions via the mods. Thank you.

posted by anonymous to Work & Money (1 answer total)

Don't treat any of this as gospel. It's somewhat state-specific. You can sell the company to the non-profit for a nominal (below-market) fee. If you're both owner of the website and an officer, director, or board member of the non-profit, you probably want the rest of the board to approve the transaction in advance, even if you're selling it for $1, as it's a related-party transaction. If the website generates unrelated business income, it's probably best that you maintain it as a separate subsidiary to avoid tax issues (but you'd want to talk to a CPA about that).
posted by praemunire at 8:23 AM on August 2, 2019 [1 favorite]