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Do We Need A 501?

Corporate Law Discussions

Do We Need A 501?

Postby Tanjiro » Sat Dec 03, 2016 4:05 am

I'm known as "The Freak on Wheels" and few months ago I started a Wheelchair Bodybuilding team, we have 5 guys "TEAM WCBBG" .  We go to competitions. We have picked up 2 Team sponsors. We receive discounts and free apparel and supplements.  The sponsors sell team based products and a % of there profits they give us to help travel expenses for shows. We make no money, no bank account, no savings. I was told we need to have a 501. Is this true?  If anyone goes pro?  If we pay to enter and the crowd pays to see the show?  Is it wrong for us to say we are non profit?

Thank you so much. This has been bothering me since I was told.
Tanjiro
 
Posts: 46
Joined: Wed Jan 01, 2014 1:43 pm

Do We Need A 501?

Postby Branhard » Mon Dec 05, 2016 6:22 am

I'm known as "The Freak on Wheels" and few months ago I started a Wheelchair Bodybuilding team, we have 5 guys "TEAM WCBBG" .  We go to competitions. We have picked up 2 Team sponsors. We receive discounts and free apparel and supplements.  The sponsors sell team based products and a % of there profits they give us to help travel expenses for shows. We make no money, no bank account, no savings. I was told we need to have a 501. Is this true?  If anyone goes pro?  If we pay to enter and the crowd pays to see the show?  Is it wrong for us to say we are non profit?

Thank you so much. This has been bothering me since I was told.
Branhard
 
Posts: 43
Joined: Tue Apr 01, 2014 8:38 pm

Do We Need A 501?

Postby Fionan » Wed Dec 07, 2016 3:35 pm

You do not need to establish an exempt organization(501(c)(3) organization) unless you want donors to be able to deduct donations.  You should not use the word "nonprofit", as that may be misrepresentation under your state's law.  Generally, the word "nonprofit" would only refer to an organization that has been established under the state's nonprofit corporation law or the state's nonprofit unincorporated association law.  

Harvey Mechanic, Attorney at Law - [email protected]
Fionan
 
Posts: 42
Joined: Fri Feb 28, 2014 6:30 am


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