Fort Myers, FL asked in Business Formation and Business Law for Florida

Q: I have an existing LLC in the state of Florida. Can it be converted to a non-profit? It is an arts organization.

Performing Arts Theatre. Live shows. Educational and Community.

Where would I find the procedure if this is a possibility.

2 Lawyer Answers

A: It is very difficult to function as a nonprofit and also as an LLC. The essential nature of an LLC is that the money left over at the end of the year gets distributed to the members, who are essentially the owners of the LLC. The essential nature of a nonprofit is that nobody is allowed to get the extra money left over at the end of the year. Although Florida law allows that an LLC can "have any lawful purpose, regardless of whether the company is a for-profit company," from a practical perspective it is hard to pull off. And if you want to apply for tax-exemption from the IRS, that's an additional hurdle. The IRS does allow LLCs to apply for 501(c)(3) status, but their guidance is that the LLC members all have to be 501(c)(3)s themselves.

An easier route would probably be to form a new nonprofit corporation in Florida and set it up as a "successor" to the for-profit LLC, obtaining its assets and branding and other property and debts.

Evelyn Suero
Evelyn Suero
  • Miami, FL
  • Licensed in Florida

A: It may be possible to merge your LLC into a new nonprofit organization where the assets of the LLC would be merged into the surviving nonprofit corporation. This is a complicated process and it is recommended that you work with an attorney to assist you.

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