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Making The Switch: Converting Your Nonprofit Into A For-Profit

Webinar: ID# 1022814
Recorded CD
Qty:
About This Course:
Nonprofit organizations operate under intense public scrutiny. No activity is subject to more scrutiny than a nonprofit organization's conversion into a for-profit organization.

Conversions must be carefully approached and structured with an eye towards how the IRS, Attorney General and/or the public at large will perceive them. There is little room for error.

This webinar delivers a crash course for persons tasked with advising a nonprofit whether and how to convert into a for-profit. We will walk through the relevant legal backdrop, various methods for converting, as well as common pitfalls and traps for the unwary.

Failure to properly approach and consummate such conversions can result in significant liabilities including, but not limited to, retroactive revocation of exempt status, expensive Attorney General and/or IRS investigations and excise taxes against the fiduciaries and individuals approving the conversions.

This course will ensure nonprofits and their advisors approach conversions with their eyes wide open and are able to utilize various prophylactic measures to protect them.

Agenda

The Landscape
  • "Definition of Nonprofit": A Common Misnomer
  • "Tax-Exempt" (Presuming Pursuant to 501(C)(3) of the Internal Revenue Code)
  • Donor Restricted Assets
  • Who's Watching?
Why "Convert"?
  • Investors
  • Excessive Commercial Activity (Unrelated Business Income)
  • Succession Planning
  • Onerous Operational Rules and Governance Scrutiny (Too Much Transparency?)
How Do You Convert?
  • State and Federal Law Components That Need to Be Harmonized
  • State Law
  • Federal Law
  • Conflict Between State and Federal Law
Common Pitfalls
  • No Legitimate Reason to Explore in Furtherance of the Nonprofit's Purpose
  • Inadequate Documentation of Prudent and Arms-Length Due Diligence and Deliberation
  • Insignificant Due Diligence
  • Ignoring Tax Ramifications (Not Just Income Tax)
  • "Counsel to the Deal"
  • The "Goodwill" and "Public Perception" Factor
  • Termination of Private Foundation Status
Alternatives?
About The Presenters

John Paul Callahan
  • Associate in the office of Reid and Riege, P.C. and is a member of the firm’s Business Law and Nonprofit Organizations Practice areas
  • Practice focuses on general corporate and nonprofit governance, preparing contracts, business formation, and business transactions including mergers and acquisitions
  • While in law school, he provided pro bono legal assistance to small businesses on transactional matters typical in the start-up phase and ongoing management of their enterprises
  • Member of the Connecticut Bar Association
  • J.D. degree, magna cum laude, Western New England University School of Law; B.S. degree, summa cum laude, Western New England University
Edward B. Spinella
  • Partner in the office Reid and Riege, P.C. and is a member of the firm’s Business Law and Nonprofit Organizations Practice areas
  • Practice focuses on providing general counsel services to tax-exempt organizations and closely held businesses
  • Has cultivated a familiarity with the culture of tax-exempt organizations by regularly speaking to nonprofit executives, volunteer fiduciaries and advisors through various educational forums
  • Has been an actively engaged member of the Connecticut Bar Association’s LLC Act Subcommittee and its anticipated overhaul of the Connecticut Limited Liability Company Act
  • Member of the American Bar Association and the Connecticut Bar Association
  • J.D. degree, with honors, University of Connecticut School of Law; B.A. degree, summa cum laude, College of the Holy Cross
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Making The Switch: Converting Your Nonprofit Into A For-Profit
Available on CD format
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Course Details
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