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    5 Replies Latest reply on Mar 24, 2012 5:39 PM by Moderator Berta

    LLC or Non-Profit??

    ncognito88 Newbie

      Last year I started an LLC servicing independent artists in the Country Music industry. My vision has expanded greatly since then.


      I want to have local "Chapters" or "Clubs" organized by volunteer "Directors", which will recruit members, host speakers, and generate fellowship among artists. These "Chapters" will receive guidance and support from the "National" (a.k.a. ME) office.


      I'm not sure if I can do this, or how, under my current LLC, or do I need to become a non-profit (the goal is to make a profit though).


      Also, should the "Chapters" collect membership dues, keep half, and send the rest to National...or should National collect all the dues, and then send money back down to the "Chapters".


      I've run this by a couple lawyers for advice...but they "had to run...get back to you later"!


      Thanks in advance for any advice!



        • Re: LLC or Non-Profit??
          LUCKIEST Guide

          Very interesting Alan


          I am NOT a lawyer. Does your LLC have a "charter"??


          What does the charter say as to independent artists and forming chapters??


          I also like your line about lawyers getting back to you later.



          • Re: LLC or Non-Profit??
            OfficeGoddess Navigator

            First off, if you intend to make a profit, I believe you CANNOT set yourself up as a non-profit agency.  I would talk to an accountant about the best way to handle dues collections.  My personal thought would be that it is more difficult to send money back down the line than to have 'National' able to keep the full amount it receives so having the Chapters (or whatever) send up half makes sense to me.


            I also suggest you contact SCORE as they may be able to make some good suggestions for you.


            Lily Chambers

            The Virtual Office Goddess, LLC

            Author: How To Do Your Own Small Business Bookkeeping

            • Re: LLC or Non-Profit??
              amyswinningways Wayfarer

              Have to agree that the best thing to do would be to talk to an accountant...and an attorney. They would be able to tell you whether or not you can(or should) become a non-profit.

              • Re: LLC or Non-Profit??
                boonodoh Adventurer

                I think there is a misunderstanding- I believe you can be a LLC or or other types of structure.  A nonprofit is a tax exemption status from the IRS, which you have to apply for by meeting certain criteria. 


                Given the plan you described, as long as you meet the criteria for nonprofit, you can get tax exempt... and you can be on the board of the nonprofit and receive a salary.  A nonprofit invests its "profits" back into the organization/cause/community, but you can still have employees (just look at most major hospitals) who are needed to carry the work.

                • Re: LLC or Non-Profit??
                  Moderator Berta Guide

                  Great question with lots of good answers. Did you get the answers you needed ncognito88?