Do Nonprofits Need a DBA? – Finanssenteret

Do nonprofits need a DBA?

Generally, a nonprofit organization must register its DBA in each state. However, in some states, a nonprofit may be exempt from DBA requirements. In certain states, the nonprofit may not be able to enforce agreed contracts until the DBA is registered, potentially facing a penalty if it tries to do so.

Read more on www.californianonprofitlaw.com

In order to conduct business under a name other than their legal name, nonprofits, like any other company, require a “doing business as” (DBA) name. A fictional name or trade name is another term for a DBA name. The question of whether a nonprofit requires a DBA name is not simple to answer, though. It depends on the regulations of the state in which the organization is located and the types of activities the nonprofit engages in.

If a nonprofit in Washington State conducts business under a name different than its legal name, it must register a DBA name. For instance, if a charity organization called “Seattle Charity Foundation” runs a thrift shop under the name “Second Chance Thrift,” it is required to register “Second Chance Thrift” with the Washington State Secretary of State as a DBA name.

Nonprofits who use their legal name or the name stated in their articles of incorporation are not required to register a DBA name in some states, such as California. The regulations of the state where the organization is located should be checked to see if a DBA name is necessary.

Let’s go on to some other related queries now: Does a Nonprofit in Washington State Need a Business License? Although nonprofit organizations are not required to pay state or federal income taxes, they may nevertheless need a business license in order to function in Washington State. The kind of license required will depend on the activities that the organization engages in. For instance, a nonprofit that runs a store or sells goods could require a business license.

A parent company may be present in a nonprofit.

Because it is not a for-profit organization, a nonprofit technically cannot have a parent corporation. Nonprofit organizations have no owners or shareholders and are managed by a board of directors. A nonprofit organization may, however, control a subsidiary, which is a different legal entity. Whether the subsidiary is for profit or not is up to you. Can Nonprofits Be Purchased?

A nonprofit or for-profit organization may purchase another nonprofit. The transaction must, however, abide by all applicable state and federal rules pertaining to mergers and acquisitions. Furthermore, the assets of the nonprofit must be given to another nonprofit or philanthropic organization.

An S Corp may be owned by a nonprofit.

Since S Corporations are for-profit organizations, a nonprofit cannot possess one. It’s against the law for nonprofit organizations to engage in significant for-profit activities. However, a nonprofit may hold a S Corporation subsidiary as long as the subsidiary’s operations are in line with the organization’s benevolent objectives.

In conclusion, the regulations of the state in which a nonprofit is located and the nature of the nonprofit’s operations determine whether a nonprofit needs a DBA name. In some areas, nonprofits may additionally need a business license to function. Nonprofits may have subsidiaries but not a parent organization. A nonprofit cannot own a S Corporation, although it may be acquired by another nonprofit or for-profit business.