For-Profit Conversion to Nonprofit
Moving from a for-profit to a nonprofit corporation requires a number of critical steps and considerations. All of your current business assets will belong to the nonprofit corporation you’re converting to and not to the individuals who started the nonprofit. And, even if the corporation fails, these assets will not revert back to you or the individuals since they are no longer under your control. The assets would instead be transferred to another nonprofit according to the “Distribution of assets on dissolution or final liquidation” clause in your state’s Nonprofit, or Nonstock, Corporation Act.
Moving from a for-profit to a nonprofit business requires a number of critical steps and considerations. Which may include:
- Creating an official Plan of Conversion document that your corporation’s board of directors must adopt and sign
- All, or most, of corporation’s shareholders must approve the Plan of Conversion
- Filing a Certificate of Conversion and Articles of Incorporation with your state’s Secretary of State