How to Sell Your 503(c) Nonprofit

Not every business is meant to be yours for a lifetime, even if you built it from the ground up. There comes a time where you’re ready to part with your company, even if it’s a nonprofit meant to do good. So let’s talk about how to sell your 503(c) nonprofit.

Before we get too excited here, it’s important to note that I’m not a lawyer or an accountant. I’ve never bought or sold a 503(c) Nonprofit, so if you need official advice you need to talk to a professional. That professional is not me.

Selling Your 503(c) Nonprofit

It’s strange to think about someone selling a nonprofit. But just like any other type of business, nonprofits change hands all the time. However, there are some additional considerations that need to be accounted for when it comes into the Internal Revenue Services.

Much like any other business, the assets of a 503(c) Nonprofit can be sold. Assets include things like property, equipment, cash and donations receivable. This can also include the personnel management.

But if you’re wondering how to sell your 503(c) Nonprofit, you need to ensure that any sale follows the rules of IRS-exempt organizations. Simply being a nonprofit doesn’t mean that it cannot enter a contract, purchasing or borrowing resources.

Financial Reporting

When it comes to making a sale, 503(c) Nonprofit companies need to make sure that they properly ensure that they meet all of the financial reporting required. That doesn’t mean just when they’re operating, but when they’re making a sale too.

That means following all of the government rules for charity businesses that are IRS-exempt to ensure that the books are ready for the sale, and the sale is done properly.

The Finer Details

It’s important to note that while a nonprofit company can be sold, it doesn’t work the same way that selling a business does. There are still selling restrictions on the actual business sale.

Not just any business or person can sell a nonprofit, but there are still sale options that will help ensure that your nonprofit can successfully change hands. For example, your non profit can be purchased by another nonprofit, and, in some cases, some conventional businesses can buy one as well.

At the end of the day, a nonprofit company can be bought and sold, but you do need to make sure that you know and follow the rules. Nonprofit business can buy or sell assets as well as enter contracts, but that doesn’t mean that they all look the same. 

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