LLC to Nonprofit
July 10, 2011 9:20 PM Subscribe
How do I turn an LLC into a nonprofit? You are not my lawyer, but maybe someone has some helpful advice. Formed an LLC to operate a hackerspace since it was the path of least resistance. We have never been profitable, we now want to go the 501(c)3 route. How do we accomplish this cleanly and legally? We're in New Mexico if that helps.
To add to that last comment, they specifically work with hacker and maker spaces around the country to bring them under a 501(c)(3) umbrella.
posted by thebestsophist at 9:43 PM on July 10, 2011
posted by thebestsophist at 9:43 PM on July 10, 2011
Response by poster: Thanks, that's helpful, I'll check that out.
posted by signalnine at 9:51 PM on July 10, 2011
posted by signalnine at 9:51 PM on July 10, 2011
Nolo has a number of resources, including (e)books. Generally speaking, you'll want a lawyer on board, and probably finding board members (or even just an advisory board) including people with relevant experience. Even if it's legally possible to operate with your existing structure, it may not be the most appropriate way to be organized.
posted by dhartung at 11:27 PM on July 10, 2011
posted by dhartung at 11:27 PM on July 10, 2011
Best answer: Well you've already got a business entity. You're going to want to basically do two things, and you're going to need a lawyer to do them.
First, see what needs to be done under the New Mexico non-profit corporation statute. Maybe nothing. But if New Mexico has a non-profit tax category, you're going to probably want to fit under it. So, lawyer.
Second, you're going to want to file for 501(c)(3) status with the IRS. I could get into it, but basically... you want a lawyer. Fortunately, the same person can do both things for you, plus keep you current with your filing, etc.
Yes, a lawyer is going to cost you money, but you've presumably got some revenue, and the cost of getting this wrong is so huge that the few hundred you're going to spend in attorney fees is going to be totally worth it.
posted by valkyryn at 4:52 AM on July 11, 2011
First, see what needs to be done under the New Mexico non-profit corporation statute. Maybe nothing. But if New Mexico has a non-profit tax category, you're going to probably want to fit under it. So, lawyer.
Second, you're going to want to file for 501(c)(3) status with the IRS. I could get into it, but basically... you want a lawyer. Fortunately, the same person can do both things for you, plus keep you current with your filing, etc.
Yes, a lawyer is going to cost you money, but you've presumably got some revenue, and the cost of getting this wrong is so huge that the few hundred you're going to spend in attorney fees is going to be totally worth it.
posted by valkyryn at 4:52 AM on July 11, 2011
Best answer: I'd recommend creating a new entity as a non-stock in New Mexico, and keeping the LLC around for other activities you might want to do in the future.
We can help you with the 501c3 part, there's no need to get your own as it can be complex, expensive, and time-consuming to maintain--and it will definitely distract you from the core activities of your space.
If you want, find me on skype as Bucketworks and we can setup a conference call to talk things through. (James from School Factory, Space Federation)
posted by hypnagogic at 10:52 AM on July 11, 2011
We can help you with the 501c3 part, there's no need to get your own as it can be complex, expensive, and time-consuming to maintain--and it will definitely distract you from the core activities of your space.
If you want, find me on skype as Bucketworks and we can setup a conference call to talk things through. (James from School Factory, Space Federation)
posted by hypnagogic at 10:52 AM on July 11, 2011
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posted by thebestsophist at 9:36 PM on July 10, 2011