Legal Question in Business Law in Virginia

Re: Do non-profits related only in name present a liability risk to each other u

I'm assuming that we're dealing with two corporations with related names and possibly some overlap in board members, but which essentially operate independently of one another. Under these circumstances, one corporation cannot be held liable for the actions of the other under an agency theory, since it's not acting as an agent. Since each corporation is a distinct legal entity, it's solely responsible for its actions.

Re: Do non-profits related only in name present a liability risk to each other u

The relationship you describe seems to go beyond name only. For example, you mention that the separate entities may be branches, franchises, or subsidiaries of a corporate headquarter. If the corporate headquarter exercises any control over these franchises, branches, or subsidiaries, an argument could be made for finding liability on the part of the corporate headquarters. This liability would be limited by the degree of separateness between the headquarters and the 501(c)(3). Feel free to e-mail me or call me at 301-662-7226 to discuss further.

Alton Drew