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Nonprofit Law/preschool separate incorporation

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QUESTION: Our preschool is currently under the umbrella of our church, and we are seeking information regarding whether or not to separately incorporate our preschool. We are in California, and would like to know legal and financial impact to both the school and our church. We would also like information regarding how much liability insurance is recommended under either scenario.  

Thank you

ANSWER: I recommend separating the real estate into a separate trust to protect that asset.  Then church operating corporation would not relatively have much need for liability insurance or for spinning off the preschool. I would be willing to work on your matter, but I would need to spend a substantial amount of time in drafting and structuring and that would be beyond the scope of my offer of free services.  If you want to inquire about hiring me for such work, please contact me directly to the email address below.

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.    





---------- FOLLOW-UP ----------

QUESTION: If we do separate, how do we best protect the preschool? We do not want to leave them vulnerable.

Answer
Well, you should make sure that you have proper procedures for training and supervising your help. The lack of that is, by far, the greatest source of exposure.  But what does not the preschool have to protect?

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic

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I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about 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 questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


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