AboutHarvey Mechanic Expertise Federal tax issues of nonprofit 501(c)(3) public charities only. Establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer question about Nonprofit's Unrelated Business or how to fill out forms. This forum is only for legal questions about a specific nonprofit asked by members or those otherwise directly effected by the specific nonprofit organization.
Experience I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar.
Expert: Harvey Mechanic Date: 5/11/2008 Subject: Charitable LLC as Non-Profit
Question In what state can one set-up a charitable LLC as non-profit?
Answer This forum is only for federal tax questions regarding 501(c)(3) public charities as I have explained in my profile. The IRS grants exemption to LLCs that are properly organized and
operated. However, it only would grant exemption to an LLC whose
members are all themselves exempt organizations.
"Because state laws generally provide LLC members with ownership
rights in the assets of the LLC, the Service is concerned that
allowing non-exempt members would result in potential inurement
problems. Thus, the LLC cannot have private shareholders
or individuals as members, and its organizing documents must
state a purpose to further the members' charitable purposes. It
should be noted, however, that the presence of solely charitable
members does not ensure that the organization will be operated
exclusively for charitable purposes."
