Legal Question in Business Law in Massachusetts
business operated from home with non-profit status
Is it legal and is there a special process including tax forms that a non-profit has to go through if they buy a house and set up a business which is open to the public that sells products. Our non-profit bookstore and community center would like to buy and renovate a house and set it up like a business, is that legal? What extra taxes or fees would we be subject to? Are we given a financial break since we are a 501(c)3 non-profit?
2 Answers from Attorneys
Re: business operated from home with non-profit status
there are specific rules governing the qualification of a non-profit as a 501 (c) 3. You need to file a form 1023 and meet the requirements of same. You need to create a non-profit entity if you have not already and file recognitiion as a charity with the MA AG's office.
If you are buying a residence to use as a business even a non-profit one you need to make sure it complies with the local zoning ordinance. Assuming it is permissable use and you will not create a nuisance by purchasing the property, then it will be OK to do so.
I think you need to speak to an attorney familiar with non-profits and the formation of same, approval as 501 (c) 3 and with the manner in which a non-profit can purchase real estate for its use.
Please feel free to contact me if you have more questions.
Re: business operated from home with non-profit status
It is a good thing your posting is anonymous... it sounds like you are in over your head if you are planning a commercial enterprise, out of a residence, and calling it a "non profit 501(c)3"... I recommend you sit down with an attorney and review whetehr your plan would cause you to forfeit your charitable, eductaional or fraternal organization (non-profit)status and whether you could open a business in a residential house.