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Forum nameBiz Ideas
Topic subjectRE: Profit or non-profit
Topic URLhttps://www.businessownersideacafe.com/forums/dcboard.php?az=show_topic&forum=103&topic_id=731&mesg_id=759
759, RE: Profit or non-profit
Posted by grafman, Thu Feb-08-07 11:32 AM
Unless you plan on receiving significant sums of money through donations or grants there isn't much of a reason to go with not for profit status. If you want to create a situation where you make your income and you provide "something to do" for the youth in your area then stick with an LLC or Sub S corp.

I suggest these entities rather than a sole proprietorship or partnership because some of your "clients" may create significant liability for you and you will need to shelter yourself from that. Those two entities are easy to create and manage, and give you adequate legal protection short of gross negligence on your part. Also you may want to make a living out of this business and its much easier to track draws by you and justify them in a for profit scenario. Plus, not everyone trusts NFP's anymore.

Depending on the state you are in there may be programs that will offer grants to NFP entities for doing what you are trying to do. There may also be some federal money in the form of grants that can come in if you are an NFP.

Additionally, people are more likely to donate to a NFP because of the tax deduction. However, for what you are doing you are just as likely to get funding from both private citizens and businesses.