Legal Question in Business Law in Maryland
Can a for profit business (LLC) form a non-profit under its umbrella?
1 Answer from Attorneys
No.
A non-profit must have its own board, a charitable mission, cannot have any "owners" or shareholders and cannot operate to benefit a specific business or individual. Being under the umbrella or direction of a LLC would run afoul of those requirements. Certain safeguards must be built into a non-profit to make sure that it is not operating to benefit any particular individual or business. That being said, a for-profit business can often foster a relationship with a particular non-profit. Business owners can participate in a non-profit and donate to same, so long as that connection doesn't violate the non-profit's charitable purpose and operation.
You are encouraged to seek comprehensive legal advice before forming a new non-profit entity. My firm offers such services to non-profits, as do many other Maryland firms and you are encouraged to contact the firm or attorney of your choosing. Please note that this post does not create any attorney-client relationship or offer of legal representation.
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