zlacker

>>modele+(OP)
There is a lot in here but turning a non-profit into a for-profit definitely should be challenged. Otherwise why wouldn't everyone start as a non-profit, develop your IP, and then switch to 'for-profit' mode once you got something that works? You don't pay income taxes and your investors get write offs.

>>silico+z11
I'm not at all clear on what a "not for profit" status even does, tax wise. In any jurisdiction.

They are still able to actually make a profit (and quite often will, because careful balancing of perfect profit and loss is almost impossible and loss is bad), and I thought those profits were still taxed because otherwise that's too obvious as a tax dodge, it's just that profit isn't their main goal?

>>ben_w+u41
NAL, my understanding: The profits aren't taxed, and the shareholders aren't allowed to take dividends out (there effectively are no "shareholders" per se, just donors); all profits have to be reinvested back into the business.

In the case of many/most (honest) non-profits, the operating costs are paid out of a combination of the dividends of an invested principal (endowment, having been previously donated by donors) and grants/current donations. Any operating profit could then be returned to the endowment, allowing the organization to maintain higher operating costs indefinitely, thus giving the organization more capacity to further their mission.