Gain a better understanding of the process of transitioning a nonprofit to for-profit and protect the nonprofit from significant liabilities.

Nonprofit organizations operate under intense public scrutiny. No activity is subject to more scrutiny than a nonprofit organization's conversion into a for-profit organization. Conversions must be carefully approached and structured with an eye towards how the IRS, Attorney General and/or the public at large will perceive them.There is little room for error. This topic delivers a crash course for persons tasked with advising a nonprofit whether and how to convert into a for-profit. We will walk through the relevant legal backdrop, various methods for converting, as well as common pitfalls and traps for the unwary. Failure to properly approach and consummate such conversions can result in significant liabilities including, but not limited to, retroactive revocation of exempt status, expensive Attorney General and/or IRS investigations and excise taxes against the fiduciaries and individuals approving the conversions. This topic will ensure nonprofits and their advisors approach conversions with their eyes wide open and are able to utilize various prophylactic measures to protect them.

Learning Objectives

• You will be able to explain the basic legal backdrop surrounding the conversion of a nonprofit entity into a for-profit entity.

• You will be able to describe the State and Federal components of how to effectuate the conversion of a nonprofit entity into a for-profit entity.

• You will be able to identify potential pitfalls relating to conversions of nonprofit entities into for profit entities.

• You will be able to review plans of conversion with an informed perspective.