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Nonprofit Law/Reorganization and separation

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QUESTION: My business partner and I are having a huge disagreement on the future of our 501(c)(3) and I am wondering if we can divide the organization into 2 separate entities? We have been incorporated since the fall of 2013 amicably for the most part, with both of us acting equally in charge.  Our board of directors has decided in the last month or so that we need to have 1 of us in charge in title and the other in a slightly subordinate role.  My issue is that I will NOT work for my partner because the organization was begun by both of us in the work and financing.  I would like to know if we can just divide the organization into 2 organizations (we work in 2 states since our organization is in a major city that borders a different state) and, if so, can the 2 organizations have separate boards of directors?
I am passionate about what we do, but I believe my business partner is more passionate about being in charge than in upholding our mission.

ANSWER: You would set up a new organization in one of the states and then the older 501(c)(3) organization would be able to grant some of its assets to the new 501(c)(3) organization organization.  As different organizations they would normally have separate boards of the directors.

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. For me to consider your individual situation and how the law applies, I would need to gather more information.

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

QUESTION: Is there a place I can go to print information out regarding your answer to show her?  I guess I really don't want to show her my original question now that I read it again.  LOL  Thank you for your quick reply!

Answer
I am willing to write a legal opinion letter and, in order for me to do that, I would need to spend a substantial amount of time.  If you want to hire me, send me an email directly to my email address below and I will quote you my fees. Other than that, I do not know of any other site where you would find that information.

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. For me to consider your individual situation and how the law applies, I would need to gather more information.

Nonprofit Law

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Harvey Mechanic

Expertise

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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