Angie, regarding the question "is being qualified for incorporation in
California the same as having filed for incorporation?"
I would have to ask Dr. B. his intent. But basically, lots of organizations file
for incorporation in Delaware simply
because they cater to such and make it much cheaper and easier to do than any of
the other states do. Then it is simply a matter of applying for status in
California as a "foreign agent", which is a nominal annual fee. That allows
you
to function
as a corporation in both states. I assume you would have to do this for each
state that you operate in, but I have only
had involvement with California.
Tawana
Angie Rayfield wrote:
Unfortunately, the waters concerning profit vs. nonprofit get muddied
a bit
when dealing with multiple states and then the IRS.
Although California makes it easy and goes strictly profit or nonprofit,
under IRS codes there are assorted varities of nonprofit--nonprofit, not for
profit, charitable, etc--and most of them have separate requirements, and
all of them have rather strict rules concerning what can and cannot be done
by the organization.
An IRS ruling in the last year or so (sorry, I can't remember exactly when)
made life difficult for a lot of groups when it comes to fund-raising.
Simplified, any on-going revenue generating activity can be considered a
business, not a fund-raiser, and different rules apply concerning how the
revenue is taxed, and whether it's a charitable deduction or not.
If I were Dr. B, or anyone with Rootsweb, I'm sure that would be a concern
with, for instance, the banners. Those aren't a contribution, they're paid
for a certain number of click-throughs. Is the IRS going to consider that
an on-going business, rather than a fund-raiser?
My guess would be that by setting up two separate corporations, one profit &
one some variety of non-profit, it increases the number of ways that money
could be raised. Charitable contributions could go to one, the other would
be conducting the "on-going business" type activities.
I'm not familiar with California law--is being qualified for incorporation
in California the same as having filed for incorporation?
Angie
> -----Original Message-----
> From: Sandy [mailto:teylu@home.com]
> Sent: Thursday, June 10, 1999 7:06 PM
> To: NCGENWEB-DISCUSS-L(a)rootsweb.com
> Subject: [NCGENWEB-DISCUSS-L] For Profit Organization
>
>
>
>
> I am one of many who have been seeking information concerning Brian's
> stated intent of organizing RootsWeb as a nonprofit and then seeking
> "charitable" (i.e, 501(c)(3) ) tax-exempt status.
>
> I think many people are under the mistaken impression a business is "for
> profit" by some sort of "default," ... in this case the impression
seems
> to be RootsWeb is "for profit" only because it has not yet filed its
> application for "charitable" status from the IRS.
>
> That is not the case with any business.
> You organize as nonprofit or as for profit.
> Specifically, in California you have two choices: for profit or
> non profit.
>
> To organize the business *as* a nonprofit, you are required to state the
> tax exempt status you *intend* to seek.
>
> This is why I find it misleading to respond to "Are you nonprofit?" by
> offering details of your preparation of an application for 501(c)(3) tax
> exempt status.
>
> The response does not answer the question, and obviously can cause
> people to believe the only reason you are not nonprofit is because the
> application must be approved.
>
> I believe it is clear many people believe this is the case for RootsWeb.
>
> Brian has stated he plans to form two corporations, one for profit and
> the other non profit.
>
> The specific identifying names of those corporations have not been stated.
>
> However, according to the California Secretary of State's Documents
> Filing Office,
Rootsweb.com, Inc., qualified for incorporation within
> the past 10 days (of June 1999) under its earlier Delaware qualifying.
>
> In other words,
Rootsweb.com, Inc. originally incorporated in Delaware.
> I do not know the date of the Delaware incorporation, the CA Secty of
> State doesn't record that information.
>
> The various papers including officers, etc., have not been received by
> the CA Secty of State's Document Filing Office because the qualifying is
> so recent (within the past 10 days).
> However, the agent for
RootsWeb.com, Inc. is Robert Tillman.
>
> The type corporation is clear regarding for-profit or nonprofit.
>
> "Rootsweb.com, Inc. is definitely NOT a nonprofit," according to the
> Documents Filing Office of the California Secretary of State.
>
> No record was apparent of another corporation by similar name of
> Rootsweb/RootsWeb having filed incorporation in California.
>
> If another corporation exists concerning RootsWeb, particularly if it is
> organized as a nonprofit, I respectfully request Brian Leverich inform
> us of this.
>
> A requirement for obtaining IRS 501(c)(3) tax exempt status *is* being
> organized as nonprofit. The structure of
Rootsweb.com, Inc., as
> currently qualified by the CA Secty of State, would preclude obtaining
> this status.
>
> Sandy
> --
>