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Corporation and Business license

Orlando, FL |

I am trying to open an small office where I am planning to help people to found a job or apply for different benefits like food stamps, student grants etc. It will be a non profit organization even if I am not interested in 501 c3 status from government. My question is the following: Will I need a business license and create an incorporation also? Will I need to get a worker compensation insurance ( I am planning to hire at least 2 employees)

Attorney Answers 5

Posted

There's no such thing as a "non-profit" without IRC 501 (c) (3) status, so I'm not sure what you mean. You may also need to seek state status as well. Non-profit, tax exempt status is reserved for those organizations that apply for and are awarded that designation, and yes you need to form a corporation for this. Please see the guides linked below.

Your questions reflect an unfamiliarity with business structure and operations, and with a nonprofit, the application is quite lengthy and complication, plus the rules you have to stick to in order to preserve the status are strict, so after you do some background reading, you really need to see a business lawyer for help.

Avvo doesn't pay us for these responses, and I'm not your lawyer just because I answer this question or respond to any follow-up comments. If you want to hire me, please contact me. Otherwise, please don't expect a further response. We need an actual written agreement to form an attorney-client relationship. I'm only licensed in CA and you shouldn't rely on this answer, since each state has different laws, each situation is fact specific, and it's impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue.

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John P Corrigan

John P Corrigan

Posted

Attorney Platt is correct..it is not mandatory but is advisable to file the Form 1023 to obtain tax free status. State law statutes define what is a non profit entity.

Posted

While you can try to operate this enterprise without making a profit, the IRS may not agree with your methods. You will want to apply for tax exempt status for this type of operation, take a look at IRS form 1023 and instructions for 1023. Incorporating would be a good idea, too. Check with the County for business licenses, but you will need to get State identification number(s) for unemployment account, perhaps other tax accounts.

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Posted

You need to register with the state. As my colleagues have said, you also need 501(c)3 status if you will be claiming the business as a non-profit, otherwise you will run into trouble with the IRS. If you will be hiring any employees, then yes you should certainly consider worker's comp.

As to incorporation, there are many benefits to such an action. Basically, it will protect your personal assets and possibly offer tax incentives. I say basically because it depends entirely on the specifics of your situation.

I would suggest consulting with a local attorney to review your business plan.

Call our office at 407-932-1650.

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John P Corrigan

John P Corrigan

Posted

You do not have to file Form 1023 to be a non profit entity which is determined by state statutes....the entity will just not be considered "tax exempt" for IRS purposes which is q the distinction. It is advisable for sure ....but an optional decision.

Daniel Antonio Hernandez

Daniel Antonio Hernandez

Posted

Absolutely true. It all depends on how what direction is desired.

Posted

It is theoretically possible to form a not for profit corporation with the State of Florida, and not file for a tax exemption under Section 501(c) of the Internal Revenue Code. That would mean, however, that you will be taxed as a corporation for federal income tax purposes. You will not be eligible to receive tax deductible contributions.

I am uncertain, however, why you would want to do so, and would suggest that you consult with an attorney who can advise you on the details of business organization and tax qualification.

You will need Worker's Compensation Insurance if you employ four or more full time employees. How these are counted will depend on your type of business organization. When you obtain your business liability insurance, your insurance agent can advise you further.

You will likely need a county business license, and you may also need a city business license, depending on the location of your offices.

Keep in mind that this answer is giving for a generic description of your business and operation, and small details can make significant differences. For that reason, you should not rely on this advise in establishing your business operation. Retain an experienced business attorney for specific answers to your questions.

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Posted

You can form a non profit corporation under state law statutes to afford you the personal liability protection you need just like any for profit corporation protects it's shareholdersnfro liability arising from the entity's operations. It is optional to then seek IRS tax exempt status by filing Form 1023 to obtain 501(c)(3) status which is defined in the Internal Revenue Code. If you want state tax free status asnwell then you will likely have to file a separate registration with that state's attorney general. Finally, if you are going tomhave employees then most states I am aware of require you to procure workers compensation insurance. As for the business license issue that will be a FL orneven county issue to do some research as it is a FL matter thatbi have no knowledge on point.

My answer is not intended to be giving legal advice and this topic can be a complex area where the advice of a licensed attorney in your State should be obtained. Please click "helpful" or "best answer" if my answer added any value or add a "comment" if you have more info for me to help you get a better answer.

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