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Starting a Small Business/Charity Event Organizing Business


I’m not sure if this is the correct place to ask this but…
I would like to start a for profit business that specializes in organizing charity events for local businesses to generate publicity and branding for that business. The basic outline would be:

1.   Local business wants to organize a charity event for a local charity. This business would then be the “Featured Sponsor” for the event. They would pay a sponsorship amount.
2.   Other local businesses would be contacted as lower level sponsors
3.   Sponsor money would be used to cover expenses of setting up the event and my payment for organizing the event.
4.   Ticket sales would go to the selected charity.

My questions are:
1.   What’s the best legal entity for this type of business? I’m thinking LLC?
2.   Is it ok to allocate the sponsorship money to expenses including my payment?


There is no right answer for the best legal entity for this particular type of business.  The choice of legal entity depends on a number of factors but the nature of the business is usually not one of the more significant factors. The main factors are  the types of liabilities you expect to incur, whether you  plan to have other owners at some point, some tax planning considerations, the formality (or lack of formality) of the structure and the relative costs of each type of entity including the cost of formation, the annual registration or filing fees and costs of preparing one or more types of tax returns.  To give you a responsible answer, someone must ask a lot of questions. Without answers to those questions, any recommendation is simply a shot in the dark.

The rules for raising charitable funds vary considerably from state to state. Most states have reporting requirements for professional fundraisers, which would probably cover your proposed activities. Some states also have specific laws that professional fundraisers must follow. While the answer to your 2nd question is that generally all of the reasonable costs of producing a charitable event can be paid out of the proceeds of the event, you need to become familiar with the laws of your state as well as the laws of any state in which you engage in any fundraising activities. Those laws are likely to contain requirements that you and your business must follow.

I hope this helps.

Starting a Small Business

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David K. Staub


I am a business and tax attorney and have spent more than 35 years assisting people in starting a wide variety of businesses. I can answer questions about the basic differences between the various entities available to new businesses, including limited liability companies, corporations, S corporations and partnerships. I can provide guidance in other areas facing start ups, such as hiring employees, signing contracts and obtaining necessary licenses. I can also direct people to sources for answers to specific legal questions which cannot be answered in a forum of this nature.


I have an extensive practice in the mergers and acquisitions area and have been involved in the tax and legal issues on hundreds of business transactions.

Staub Anderson LLC
Illinois business attorneys

Practice Areas
Business Organizations


-Joint ventures
Mergers & Acquisitions
-Buying/selling business
Securities Law
Tax Law
Technology Law
-Software licenses
-Development agreements


Illinois State Bar Association; Chicago Bar Association (former Chairman of the Corporation & Business Law Committee and former Chairman of the Mergers and Acquisitions Subcommittee; former Executive Committee member, Federal Tax Committee and Chairman of subcommittee on general tax issues); Keystone Foundation (Trustee); Association for Corporate Growth; Midwest Entrepreneur Forum; Midwest Association of Alpha Delta Phi

Commerce Magazine; YLS Journal; ISBA Section of Taxation Newsletter

Harvard Law School, J.D., 1977; University of Illinois, B.S. in Accounting, with highest honors, 1974

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