Legal Question in Business Law in California

I have a for profit educational (& other health/wellness services) business that makes products (books & audios). I am thinking of starting of non-profit business which would take over just the seminar part of the business, servicing middle schools (with clear lines of division with my for-profit bus).

Can I license my products to my non-profit business and in essence, have both businesses profit on that product? (My for-profit business would also be selling same product to other entities).

The point is, I have a passion for getting these skills out to students (& it has proven successful in the past 5 years), but I need to protect the intellectual property of 1) the actual program 2) products that will teach the skills/program.

So, I'm thinking the non-profit business will simply be set up to strictly handle the seminar, in-person teaching of the program, not the intellectual property of the program or the products (except to possibly license the products, as I've described above.).

Is this a viable/legal plan? Any things I should be aware of, going down this road?

Thanks much!


Asked on 10/29/09, 2:23 pm

2 Answers from Attorneys
Terry A. Nelson Nelson & Lawless

You can set up the two companies, but non profit means just that, it can't operate for profit. It can only do incidental fund raising to cover operational expenses or to raise funds for donation to other charities. The non profit could be your educational arm, with incidental steering people to your profit arm with literature, etc. If you want legal help setting this up correctly, feel free to contact me.

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Answered on 11/03/09, 6:00 pm
Bruce Beal Beal Business Law

You should carefully review the following link:

http://www.asaecenter.org/PublicationsResources/whitepaperdetail.cfm?ItemNumber=12225

Please note therein that there are advantages to setting up the profitable entity as a subsidiary of the nonprofit entity.

If you would like to discuss this matter further in a more private forum, please feel free to contact me directly at the email address provided by LawGuru or through my firm�s website located at BealBusinessLaw.com.

I do not know all the facts of your case, and I do not legally represent you. Although I strive to make sure the information I provide is generally accurate and useful, you should promptly consult a lawyer who can learn the details of your case more completely, to ensure that the information I provide, and your interpretation of it, is appropriate to your particular situation.

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Answered on 11/05/09, 1:59 pm


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