We plan on having car shows and throwing events and donate proceeds to local cheraties in our area. We know we need a sellers permit however I am unclear if we need to be a DBA or if we should file for a tax exempt 501c3 nonprofit status.
If you intend to run a non-profit event organization that benefits the community, then you should create a separate non-profit entity and seek tax exempt status. Whether or not you need to file a DBA depends on additional information that is not clear from your post. Consult with an attorney to see what appropriate steps you should take to ensure proper corporate formation so you can focus on the events.
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You do not “be” a dba. If you’re doing business as [insert name] while the business’ real name is something different, you should file a fictitious business name statement.
As to whether you should file for nonprofit status, that is up to you depending on whether you want to be a nonprofit and think you can comply with the requirements for nonprofit status.
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You can create, register and use a d/b/a (which means "doing business as") as an individual person or as corporation; but you will not succeed if you try to "file for a 501c3 tax free status" as a person.
And you will need an FEIN before the IRS will consider or grant tax free status.
First, will their be issues of potential liability with regard to motor vehicles? I say, yes, and therefore highly recommend a non-profit corporate entity under CA corporate law to insulate all individuals connected to the car club from personal liability. Have an elected BOD who want to run things correctly.
Next, if you will be fundraising, distributing funds to charitable causes and representing to public the idea of tax deductibility, I highly recommend becoming a 501c exempt organization under the Internal Revenue Code. That process is tedious and detailed to administer.
For both of these efforts, I suggest appointing a corporate attorney and a business CPA to your initial group. Diversify the appointments in order to have a broach coverage of needs. An insurance agent is another important actor here.
This commentary does not result in any attorney/client relationship nor constitute legal advice as to a particular fact situation or status of a reader. Consult and retain legal counsel in the State of Michigan for pursuit of such a relationship.
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